Corporate Social Responsibility

Case Study: Progress out of Poverty Index (PPI)

Generating the data intelligence to serve poor populations in India

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Cisco partner, the Grameen Foundation, manages the Progress out of Poverty Index® (PPI), a measurement tool that anti-poverty organizations, businesses, and microfinance institutions (MFIs) like Grameen Koota are using to empower poor individuals and households in India to become financially independent and break free from poverty.

The Issue: Low-income people lack access to financial products and services

Poverty in India is a critical problem. People living in poverty lack access to basic financial products and services like loans, savings accounts, and insurance. These services help low-income households to increase their income, save for the future, and tolerate financial shocks. Many organizations are working to help poor people, especially women, become more financially self-sufficient, but they lack data that enables them to assess whether their initiatives are working, and track poverty levels over time. 

  • Women in India make up only 13.8% of all urban workers and earn 62% of men’s salary for equal work.
  • 17% of India’s 1.25 billion citizens live below the national poverty line (NPL).
  • The urban population is expected to increase from 27.8% in 2011 to 38% in 2025, making jobs critical to families in slow-growing rural areas.
  • India’s economy grew by 4.7% in 2013, far below the government’s expectations of 8%.

The Solution: Using data to track impact

Grameen Koota provides micro-loans, banking services, insurance, and other financial programs to help poor people in India raise their standard of living and break the cycle of poverty for themselves and their families. Seventy percent of Grameen Koota’s clients live on less than US$2 a day. Grameen Koota began using the Progress out of Poverty Index (PPI), developed by Grameen Foundation, to measure the impact of its programs.

  • The PPI is a set of 10 simple, country-specific questions used to determine a family’s poverty level against the national poverty line.
  • Questions include:  How many household members are 17 years old or younger?  What is the education level of the male head/spouse?  What is the primary source of energy for cooking?  Does the household have a mobile handset and telephone landline?
  • The PPI data informs how Grameen Koota designs new products, and helps them target those products to specific types of customers by poverty level, gender, and geography.
  • Grameen Koota collects PPI data on a yearly basis for more than 650,000 clients.  This enables them to track client poverty levels over time.

Impact Multiplied

Grameen Koota now operates in 3 states in India through 200 branch offices with a goal of helping 2 million poor and low-income households by 2020. By using the PPI, Grameen Koota has been able to target clients by poverty level and geography, improving business and product efficiency while serving poor women and families in India.

  • PPI enables Grameen Koota to measure poverty rates among new clients and those who have taken repeat loans.
  • Over a five-year period, 46% of GK clients were outside the $2/day poverty line – up from 29%
  • From 2004 to 2012, poverty levels of Grameen Koota households dropped at least 3X more than the national average of 2.18%