Monitoring tools

The PPI is a ten-question survey tool developed by Grameen Foundation. This tool enables microfinance institutions to accurately select clients that are poor. In addition, implementation of the tool over time provides information whether clients have moved out of poverty. Oikocredit promotes the implementation of PPI among its partners to ensure they reach out to the poor and that MFIs do not shift to other target groups.

The PPI in South America
Since 2008, 17 project partners in Peru and Ecuador have piloted the PPI. Some have integrated data collection and monitoring into their operations while others use the tool to reaffirm or adjust their targeting strategies. Download the Report 'Measuring outreach in Ecuador & Peru'

The PPI in Asia
Three project partners in the Philippines started to use the PPI after piloting the tool in 2008. A year later, six other partners in the Philippines decided to follow. In 2010, Oikocredit introduced the tool to project partners in Cambodia. ASKI, Paginupdanay and RSPI have successfully integrated data collection into their operations and are developing further policies based on the outcome of the PPI. Data from these three MFIs show that clients have moved out of poverty. In total nine project partners in the Philippines and two in Cambodia received assistance to use the PPI.

Next steps
Following the initial results from microfinance institutions, Oikocredit is committed to further promote use of the PPI. Oikocredit partners who use the tool and demonstrate consistently that they are focused on reaching poor people are considered ‘preferred partners’ who are eligible to receive better terms and conditions on loans from Oikocredit and to access capacity building funds to improve their services to clients. After its introduction in the Philippines, Cambodia, Peru, Ecuador, Mali and Senegal, we plan to roll out the PPI to partners in Guatemala, Honduras, Nicaragua and El Salvador in the near future.

Case studies for download

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In 2008, Oikocredit began to use the Social Performance Indicators tool: an audit much like a financial audit. It assesses the social performance of an organization by evaluating its intentions and actions, and shows whether a particular project partner is reaching the people it intends to reach. 

The SPI focuses on process management. It looks at the organization's stated objectives and the effectiveness of its systems for achieving them. It analyzes social performance using a wide range of indicators, comprising four dimensions:

• targeting and outreach
• benefits to clients
• products and services
• social responsibility

This gives an organization a comprehensive overview of how their actions measure up against a number of common social objectives. Using the SPI tool enables an organization to:

• make an initial assessment of the quality of their processes compared to their mission and objectives
• strengthen the organization's attempts to improve social performance and stimulate internal dialogue on the issue
• increase transparency and improve credibility among clients and donors
• reinforce the organization's system of governance and knowledge of their activity
• enable an organization to distinguish itself from its competitors by adopting an explicitly social approach

The SPI tool for MFIs was designed using an open, collaborative and transparent approach. Updates to the SPI include a better appraisal of current issues in the microfinance sector (interest rates, consumer protection and environment) and compatibility with social performance standards to be reported to the MIX MARKET^TM, a global, web-based, microfinance information platform.

Case studies for download:

Before any organization becomes an Oikocredit project partner, it is measured against a number of social performance criteria. Oikocredit has developed a screening process, an ESG  (environment, social, governance) scorecard, that reflects Oikocredit's core social selection criteria with clear client protection principles, and vigorous environmental and governance criteria. This is a key step to ensure the right target groups are reached.

As part of the regular screening process, project partners must share details on interest rates they charge on their main financial products. Using its network of partners and field staff, and comparing the interest rates to what is standard practice in the region, Oikocredit determines whether the interest rate is acceptable.