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Workshop Session: Depth of Outreach: The New U.S. Law Requiring Cost-Effective Measurement Tools

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Workshop Session: Depth of Outreach: The New U.S. Law Requiring Cost-Effective Measurement Tools

Anton Simanowitz: I think it's clear from the panelists that we all agree that poverty outreach is a necessary objective in microfinance, it's a goal that we all agree on. But what I'd like to know from the panelists is whether they feel that legislating for poverty, the years spent [developing] poverty assessment tools, is a necessary tool to achieve this objective. A second part of that question is whether this is a sufficient tool to achieve the objective.

Joanne Carter: …I don't think it's sufficient to have poverty measurement tools alone but I think it's absolutely necessary. If we can't track this and we can't measure it and we can't report on it then we have no way of knowing if we're moving in the right direction. I think that a step related to this that's a very important part of this is actually figuring out how to build in incentives for programs. You know, specifically more incentives for programs to be able to move in the direction of the goal. As we're tracking this goal, how do we support programs to do this? But I think that without being able to measure it, and without actually asking to measure or report on it, the rest is pretty meaningless. And I would say the answer to, "Is it necessary to legislate on this?", you know you're talking to an advocate so, in some sense you know I see that as an important strategy. But I think the answer is… that we were talking about this for a decade and we weren't really moving forward on it and since we passed this legislation, I think in some ways the best of all that could happen has happened. The aid agency… working on this and the practitioners are now working together to figure this out and that's having ripple effects through the industry. And now I think as we figure out what those tools are and begin to use them, you know, it's going to have even more effect and there is the potential for other donors to take it up...

Stacey Young: …Chris has made a very persuasive case for the need to measure the poverty status of our clients. I think that's absolutely true, but my concern is that because of the way that this has been crafted as a legislative mandate with very specific metrics and parameters there's a lot of resources going into, into that particular type of approach to poverty measurement. I would like to see more emphasis on leveraging lessons learned about how to reach difficult-to-reach clients. And how to make that sustainable as well as clearly directed towards the needs of those clients.

…I think we're in some ways asking this legislation to solve all of our problems and I don't think it does. I think it, all it does is open up the space to begin to solve some of those problems. You know I think we know the situation we were in before which is a couple of things. One is that there were very few incentives built into the system for programs to actually begin to develop new products or new programs to reach down to the very poor and in fact there were disincentives. So, we were making it harder in some ways, albeit unintentionally, for programs to reach down. So is measuring poverty sufficient to figure out all of this? Not at all. But is it necessary? You know, do we need to be able to know whether or not we're even reaching poor people before we benefit them? I totally agree with your point about impact. I mean I think we need and an important other step is to actually measure impact, but we can be pretty sure that we're not impacting the very poor if we're not even reaching them. You know, and we can be pretty sure that we're not going to benefit the very poor if we've actually built disincentives into the system.

Chris Dunford: I'll try to focus on some points that weren't touched on by my two colleagues.

…On the issue of rationale for legislation, just to expand a little bit on what Joanne said, I think the important part here is that the rationale was to try to open up the possibilities for learning about what can work well or not so well in microfinance to serve poorer people [better than they] are being served right now or at least how to serve more of those poor people.

And as Joanne said poverty measurement is just a start. We're sort of trying to tackle the most basic issue first, that is to identify who we're working with before really tackling the really much more complex issue of tracking change over time in the lives of those people, that's, that's the impact. Hopefully, the preferred outcome in the development of these poverty measurement methods is to develop at least some methods that reflect indicators that are sensitive to people's participation in a microenterprise development program over time. For instance our experience at Freedom from Hunger with food security is that self-reports of food security is an indicator very sensitive to program participation over time. But at the same time food security status may very well be very closely linked to a person's poverty status. It makes sense that it would be, but that needs to be validated through testing. So there's perhaps going to be some of these poverty measurement indicators that will be useful for tracking changes over time in poverty.

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