The PPI at a Kenyan MFI: "Uncertainty, Transformation. Wow!" >

Alex Murray
• Posted in ppi implementation, Kenya

Are we fulfilling our mission? How do we implement our vision?

When steering an organization, continual review of strategic objectives is essential to ensure managerial decisions align with the mission statement and long-term vision. Faced with day-to-day operational pressures, how can leadership ensure its decisions correlate with its stated mission?

For Musoni Kenya Ltd (Musoni), integration of the Progress out of Poverty Index (PPI) has had a welcomed impact for the microfinance institution. With self-collected PPI data on its customers, Musoni gains a deeper understanding on its clientele.

"This is where our mission is tested," said Helen Osore, Musoni's Business Development Manager regarding the effect of PPI data on organizational strategy. "Are we living up to our mission? Does reality mirror our mission?" Through its recent adoption of the PPI and data-collecting technology in its operations, Musoni overcame initial organizational concerns to learn about its clientele, validate an existing strategic course of action, and tailor future product offerings.

The PPI implementation process began in February 2013, when Musoni staff received PPI training to initial reservations. "PPI implementation would be a challenge," said Osore when describing general opinion from other staff members during trainings. "There was much uncertainty. We were not sure how clients would react to the questions."

"How do you ask about irons, towels, and frying pans?" said Mr. Odwa, the Manager of the Kitengela branch, when expressing his initial concerns. "We thought these to be sensitive issues in Kenyan society until it was demystified."

Comprising 10 questions about household characteristics and asset ownership, the PPI is a poverty measurement tool that assists organizations seeking to serve the poor. Data collected assists to assess the likelihood that a household is living below the poverty line. Sample questions include:

The floor of the main dwelling is predominantly made of what?

How many mosquito nets does your household own?

What is the main source of lighting fuel for the household?

"At first, borrowers didn't understand why we were asking the questions," said Musoni Wealth Creation Officer, Jemimah Wanjiru, "Many asked if Musoni would still give them loans." With assurance that PPI was not designed as part of the loan appraisal system, borrowers answered the PPI questions with more confidence.
The willingness to provide answers validated the strength of Musoni's relationship with its clientele. "Our fears were not confirmed," said Odwa, "Clients trust us. A stranger would not share the number of mosquito nets."

"The results are transformational," Osore said of the PPI results. The results found examples of both extreme poverty and clients in need of larger loans. The latter group, though not Musoni's target customer, still requires Musoni's services. This borrowing group also allows Musoni to learn about a group into which it hopes its target clients will graduate.

"The data collected so far gives us a snapshot of our client base," said Stanley Munyao, acting Chief Executive Officer of Musoni. "We can see who is most prone to poverty based on age, gender, and other factors." The results allow Musoni to make management decisions on its strategy through incorporation of PPI findings to tailor product offerings.

Effective use of PPI data not only formulates future organizational strategy, but helps to assess current organizational decisions. Musoni is currently working to implement a rural expansion. The PPI data collection validated this organizational course of action, as many of the potential rural clients live beneath the poverty line based on PPI results – Musoni's target clientele.

When used effectively, the PPI data benefits the organization. To ensure the effectiveness, data is collected on mobile tablets, which Odwa describes as, "the best thing that happened to us."

"We're happy that we began manually in order to compare," said Osore of the tablets. "With the tablets, we've realized increased accuracy and efficiency."A 10-minute manual exercise with paper and pen now requires only three minutes. Equipped with a dropdown menu, the tablets created order and standardized the process. Loan officers are able to move quickly and serve the most in the shortest amount of time.

"Wow!" said Osore when describing the roll out, implementation, and execution phase of PPI incorporation at Musoni. Moving forward, she hopes the organization can incorporate PPI to look further at the characteristics of poverty. "Client needs have become the heartbeat of the institution. It's made us wonder if poverty is only the absence of material things. Let's dig deeper. What is poverty?"

As Musoni continues to gather PPI data on its clients and incorporates the results in decision-making, the results will steer the organization to design products to reach the poor and fulfill its mission:

To grow, build, and maximize the potential of the businesses of the poor and unbanked of Kenya through the provision of affordable, flexible, and customer-oriented financial services.