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SONATA: Progress out of Poverty Index (PPI). Pilot Summary of Analysis February 2009. Sonata’s Mission and Goals. Mission: “Identify and motivate poor women in a cost-effective way and deliver them micro finance services in an honest, timely and efficient manner." Goal:

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sonata progress out of poverty index ppi

SONATA: Progress out of Poverty Index (PPI)

Pilot Summary of Analysis

February 2009

sonata s mission and goals
Sonata’s Mission and Goals


“Identify and motivate poor women in a cost-effective way and deliver them micro finance services in an honest, timely and efficient manner."


“SONATA's ambition is to ensure that at least 50% of people who enter the program cross the poverty line within 5 years of participation in the program.”

progress out of poverty index
Progress out of Poverty Index

What is it?

  • An objective client poverty assessment and targeting tool, which:
    • Provides client poverty level, social performance, data
    • Enables MFIs to manage social performance
  • An inexpensive and easy to collect scorecard
    • Derived from representative national household income and expenditure survey
    • Comprised of simple, non-financial indicators
who is using the ppi
Who Is Using the PPI?
  • Within the Grameen Foundation Network
    • Asia – 9 partners
    • Latin America – 4 partners
    • MENA – 2 partners
  • Globally
    • MFIs: Over 40 institutions
    • Social investors
    • Social raters
    • National/Regional networks
    • Government institutions


sonata s ppi pilot design
Sonata’s PPI Pilot Design
  • PPI Pilot objectives:
    • Gather representative PPI data across six branches in the UP region
    • Gauge the operational and logistical challenges and opportunities associated with implementing the PPI
  • Pilot Scope: Six branches
  • Pilot Duration: Eight weeks
  • Pilot Sample Size: Census approach, all incoming and renewal clients within an eight-week period.
ppi pilot collection
PPI Pilot Collection

*Clients without a loan cycle specified were not used in the analysis and are displayed under the ‘Applied for Loans’ column.

**32 entries were not included in the analysis due to duplicate entries.

overall ppi analysis
Overall PPI Analysis

Entering Clients

  • 26% of new clients are below the national poverty line,
  • 38% are below the $1/day poverty line, and
  • 88% of the clients are below the $2/day poverty line.

Renewal Clients

  • 30% of renewal are below the national poverty line,
  • 46% are below the $1/day poverty line, and
  • 91% of clients are below $2 a day.
rural vs urban
Rural Vs Urban

Looking at the entering clients(below), it is clear that the rural clients are more likely to be poor (29.7% below National Poverty Line as compared to 12.2% for the entering Urban clients.)

branch wise analysis
Branch wise Analysis

Branch wise classification

  • In terms of branch wise classification of poverty levels, there is a great range of poverty levels across branches, especially for entering clients.
  • For example, Saray Akill is targeting the poor in the sample with over 33.3% of the entering clients below the national poverty line and almost half of the clients below the $1/ Day poverty line
  • Renewal clients, however, seem to have the same likelihood of poverty across branches.
occupation of clients
Occupation of Clients
  • Animal Husbandry, Buffalo, and Goat purchasing is the most common type of business that clients are doing. Approximately 60% of the entering clients (249 clients out of the 416) are involved in this business.
  • However, looking at poverty likelihoods, 35% of such entering clients (in animal husbandry) are below the national poverty line.
  • The renewal clients who own general stores are less likely to be poor as compared to renewal clients in other occupation, quite understandably.
loan amounts and poverty
Loan Amounts and Poverty…

For both entering and renewal clients, the higher the loan amount, the less likely the client will be below the poverty levels (excluding those with a loan amount of zero).

age and poverty
Age and Poverty


  • In terms of age, the entering clients mostly fall between 25-45 years. Though clients across all age groups have almost the same poverty levels, further analysis shows that the younger entering clients are poorer than the older new clients.
  • The renewal clients show the same patterns of likelihood of poverty, irrespective of the age group. However, the renewal clients above the age of 45 seem likely to have the least possibility of falling below the poverty lines.
  • It does make a lot of sense to position ourselves on the social front, which has been one of the key USPs of Sonata
  • More so, when we have things like socials ratings, social performance, social audits
  • CHI V/s PPI
    • CHI – targeting
    • PPI – targeting, tracking, impact assessment, national level bench marking, strategic decision making
  • Implementation Plan – next slide
    • As a Performance measurement tool
    • As an Impact Evaluation tool
    • Census approach (entering, renewal, cycle 1/3/5, 2/4/6, exit clients)
    • Sample basis (a few clients, a few branches, a few years)
  • Synchronization with the MIS
    • Repeated / Multiple set of information
    • Interface software tool from GF
addressing implementation key factors
Addressing Implementation: Key Factors
  • Key factors to consider when preparing for implementing the PPI

Management Information Systems

Quality control & validate requirements

Reporting capabilities

Human Resources

New employee (staff & Mgrs) training

Ongoing training


Collection protocol/policy

Collection quality control

Performance Management

Reporting (internal/external)



poverty lines
Poverty Lines

Based on the same data1 the PPI is based on:

  • 17.0% of Indians are below the National Poverty Line (Rs 14.25)
  • 8.4% of Indians are below the USAID “estreme” line (Rs 11.94)
  • 9.5% of Indians are below $0.75/Day/PPP (Rs 11.53)
  • 25.4% of Indians are below $1/Day/PPP (Rs 15.38)
  • 42.6% of Indians are below $1.25/Day/PPP (Rs 19.22)
  • 56.9% of Indians are below $1.5/Day/PPP (Rs 23.07)
  • 74.9% of Indians are below $2/Day/PPP (Rs 30.75)

1Source: Microfinance Risk Management, L.L.C. based on Schedule 1.0 of Round 62 (July 2005 to June 2006) of India's Socio-Economic Survey (SES) conducted by the National Sample Survey Organization (NSSO, 2005).