At Deki, our goal is to help those who are most vulnerable and impoverished. To this end, we implement an assessment for all of our prospective loan applicants to measure their current level of poverty. This is achieved by using the Poverty Probability Index.
‘The Poverty Probability Index (PPI®) a poverty measurement tool for organizations and businesses with a mission to serve the poor. The PPI is statistically-sound, yet simple to use: the answers to 10 questions about a household’s characteristics and asset ownership are scored to compute the likelihood that the household is living below the poverty line’
These measures vary from country to country, but encapsulate key factors which indicate whether an individual is living in poverty.
From initial assessments with first time Deki borrowers we found that 16% were likely to be living on less than $1.90/day with our Field Partner IADES in Togo, and 26% were living on less than $1.90/day with our field partner New Home in Uganda.
After their first Deki loan entrepreneurs increased ownership of basic necessities. For New Home entrepreneurs this meant that 11% versus 6% had the capacity to use higher quality fuels, such as paraffin, or have access to electricity rather than relying on burning dung or reeds, while 90% of homes had access to a mobile phone versus 82%. At IADES, this translated to 58% of entrepreneurs having access to vehicles versus 46%, allowing easier access to services and opportunities. 85% of entrepreneurs were able to afford fans versus 70%, which aid in keeping mosquitoes away and lower risks of contracting malaria.
*Poverty indicator descriptions are simplified for these graphs; full poverty index questions and calculations can be found in full at https://www.povertyindex.org
Overall, by the 1st loan at IADES, we found that the average probability of being under the $1.90/day poverty line was an average of 16% but fell to 9% by the start of the 3rd loan. While with our partners at New Home, this probability has been stable around 26% over all loans