Measuring Poverty: A Pie in the Sky?
Both of the readings assigned this week emphasized the idea that we have to be able to measure the affect this organization has on the people it is reaching out to. Datar may emphasize this less so than “Real Good, Not Feel Good,” and even offers more qualitative examples of measuring poverty, but both focus on creating a standard for which to see progress. This “idea” is based off of many of the MFIs in existence, but does not necessarily work for La Ceiba. The reasoning for this is two fold: (1) La Ceiba’s finest attribute is its flexibility and desire to change based on its client’s needs, (2) its desire to reach the “poor of the poor.”
The history of La Ceiba has few, if any, standardized loans. Most are personal loans with a personalized repayment structure; and if it is not personalized from the beginning, its potential to become personalized is high. This is not meant to be a bad thing by any means; in fact it is part of the uniqueness of this organization. Considering the small number of clients we are probably one of the few MFIs to be able to make so many adjustments, and this can rightly be credited to the personal relationships that members have formed with clients. Flexibility however, makes it very difficult to measure our impact. We cannot base success off of the rapidity of repayment because we are so willing to adjust their repayment schedule and restructure their loans. Our impact cannot be based on income, because most of our loans have been income- smoothing loans rather than business loans and consequently reflect very little increase in actual income.
What is most important is that this is not necessarily a bad thing. Of course it would be great to be capable to fully measuring our impact on our clients so that we are able to improve out institution, but the flexibility of this organization offers a unique opportunity to not only the people we work with, but also to ourselves. The abandonment of what makes us unique for the sake of measurement could harm the framework that has been established.
Most notably, it could take La Ceiba away from working with the poorest of the poor. This organization’s desire to help regulate the lives of our clients has required that we be willing to take risks on people without guarantee of repayment and without any formal account for how the loan will be used. Most would look at this as and see the actions of unsuspecting, altruistic do-gooders with no real investment in alleviating poverty, but this is not the case. What I think has kept this organization from realizing true impact is the lack of infrastructure present in the area we work. This is a symptom of working with people who are considered the poorest of the poor, and will continue to plague us as long as this is our mission.
Perhaps one way to measure the alleviation of poverty in this instance is the community’s creation of a formal system and institutions that allow them to operate in a larger market. One of the main, present concerns is that we are flooding the market with 7-11 type stands (poparias??), which in a small market creates too much competition for sustainability. This lowers our chances of getting the loans repaid. If the community is able to come together under a more formal system, they may be able to open themselves to a larger market. Right now, because of the income smoothing loans, we are undoubtedly having a large impact on the money currently circulating in the area. If they are able to open up to a larger market they will have a greater flow of money circulation. In addition, the diversity of goods sold can be an indicator of poverty alleviation. If all that is present in the market are the basic necessities of life, then it can be generally understood that such good s are all that can be afforded. If other goods begin to enter the market, that can be a general indicator that people are able to afford things other than what is necessary to survive.
