poverty outreach of selected microfinance institutions in the philippines mcpi conference, july 26,...
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Poverty Outreach of Selected Microfinance Institutions in the Philippines
MCPI Conference, July 26, 2012
Poverty Outreach Report
• Commissioned by GF, MCPI, Oikocredit and MMC
• Written by Prof. Ron Chua, Ms. Chona Sebastian and Ms. Aya Silva
• http://www.progressoutofpoverty.org/PhilippinesPovertyOutreach
Key Themes
• Poverty Penetration amidst intense competition
• Poverty Concentration & Rural Poverty• Scale & Concentration of Outreach
Poverty Penetration amidst intense competition
6% 0%3% 3%
4%
3%1%
6%
7%0%
-
50,000
100,000
150,000
200,000
250,000
Cebu Negros Occidental
Batangas Davao del Sur Pangasinan Iloilo Zamboanga del Sur
Camarines Sur
Quezon Maguindanao
Poor HH served MFI clients without PPI scores Poor HH not reached
MFI Penetration in Provinces with Highest Magnitude of Poverty
Poverty Penetration amidst intense competition
• Generally low penetration levels• Yet every MFI claims intense competition on the
ground• How do we reconcile?• Pockets of saturation, both geographic and socio-
economic?– Do MFIs deliberately focus on the Entrepreneurial
Poor?– Who is the Entrepreneurial Poor?
Poverty Concentration & Rural Poverty
0%
10%
20%
30%
40%
50%
60%
70%
80%
0% 10% 20% 30% 40% 50% 60% 70% 80%
MFI
Por
tfol
io P
over
ty C
once
ntra
tion
Provincial Poverty Incidence
A
B
C
D
E
F
G
H
Concentration and Scale of MFIs Outreach
Poverty Concentration & Rural Poverty
• Although poverty concentration increases as MFIs serve poorer areas, the gap between poverty concentration and the provincial poverty incidence also widens
• Significant challenges to serving remote areas• Yet many MFIs claim that because they are operating
in poor areas, they must be serving poor households• How effectively are MFIs targeting their clients?• Do we have the right products for the rural poor?
Scale & Concentration of Outreach
31% 39%18% 27% 30% 37% 34% 36% 40%
69% 61%82% 73% 70% 63% 66% 64% 60%
0%
20%
40%
60%
80%
100%
*PH* A B C D E F G H
Below NPL Above NPL
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
A B C D E F G HCNumber of Clients Below NPL
Scale
Concentration
Scale & Concentration of Outreach
• MFIs that serve the most number of poor HHs have relatively lower poverty concentrations
• Yet MF sector tends to look at poverty concentration as the main indicator of good social performance
• Are scale and concentration mutually exclusive?– If an MFI wants to have both, what does it need
to do?
Improving Poverty Outreach
• Measure outreach using poverty indexed instruments and target clients using clear cut-off scores
• Understand the needs and develop appropriate products and delivery systems for the non-entrepreneurial poor and rural, agricultural households
• Consider both poverty incidence and poverty magnitude when expanding operations
For More Information:
Cristopher LomboyAsia PPI [email protected]
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www.progressoutofpoverty.org/PhilippinesPovertyOutreach