The Background of Poverty Probability Index

In 2005, Grameen Foundation commissioned the development of the Progress out of Poverty Index® (PPI®) with the support of the Consultative Group to Assist the Poor (CGAP) and Ford Foundation. Their goal was to create an easy-to-use poverty measurement tool for microfinance institutions, understanding that these institutions need reliable poverty data to manage their social performance.

Mark Schreiner’s simple poverty scorecard resonated with Grameen Foundation because of the characteristics it shares with the Grameen Bank's 10-Point System. The Prizma Microfinance (Bosnia) scorecard also inspired the development of the PPI. After pilot testing the PPI, Grameen Foundation instituted a training program for MFIs interested in using the PPI, which helped to facilitate the initial adoption of the tool.

Today, the PPI has proven its reliability and feasibility to many organizations around the world. Armed with client-level poverty data, these organizations are now making more informed decisions and assessments. The PPI is now used by a wide range of organizations—international NGOs, social enterprises, donors, investors, multi-national corporations, governments, and more—across a variety of sectors including agriculture, healthcare, education, energy, and financial inclusion.

In July 2016, in order to facilitate the long-term sustainability of the tool, the PPI Alliance was formed and the PPI moved its home from Grameen Foundation to IPA and created a new construction methodology behind the PPI. In October 2017, the PPI was rebranded as the Poverty Probability Index.