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Sajjad Zohir, Discussion of Nationwide Surveys in India and Bangladesh on Client Movement Above the US$1.25 a Day Threshold and on Tools MFIs Are Using to Measure that Movement
 

Sajjad Zohir, Discussion of Nationwide Surveys in India and Bangladesh on Client Movement Above the US$1.25 a Day Threshold and on Tools MFIs Are Using to Measure that Movement

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    Sajjad Zohir, Discussion of Nationwide Surveys in India and Bangladesh on Client Movement Above the US$1.25 a Day Threshold and on Tools MFIs Are Using to Measure that Movement Sajjad Zohir, Discussion of Nationwide Surveys in India and Bangladesh on Client Movement Above the US$1.25 a Day Threshold and on Tools MFIs Are Using to Measure that Movement Presentation Transcript

    • Client Movements across a threshold of $1.25 a dayand proxy inferences used to track such movements Findings from a nation-wide survey in Bangladesh Sajjad Zohir Research Director, Economic Research Group www.ergonline.org Presented at the Global Microcredit Summit 2011 Valladolid, Spain Sajjad/Valladolid/14-17 Nov 11 1
    • Background and Outline• A study in 2009 trying to capture the number of MFI clients moving above the threshold (poverty line)- Monitoring on a regular basis; versus- Stock-taking at an interval.• The process with expert panel involving academia and practitioners; and choice of ‘respectable’ methods to convince the critics- Lead academic/researchers in the field and representatives from major MFIs- External expert to develop poverty scorecards- Local research agency to undertake the design, survey, analysis and report writing• Current presentation- Outline general methods and leave the details for discussion- Important findings from Bangladesh study- Are we asking the right questions? Sajjad/Valladolid/14-17 Nov 11 2
    • Brief on Methods - Concepts• Choice of a threshold: US $ 1.25 PPP per person per day• Who do we measure? Clients are individuals, while measures on poverty status refer to households. We addressed ‘graduation’ at household level.• But habitats are not stable. With mobility, how does one capture the ‘population’? How to account for urban-rural dynamics?• What do we measure with? Proxy inference in the guise of Poverty Scorecards (poverty likelihood measures tagged to various score groups) developed from HES/HIES unit level data and using bootstrapping technique. Sajjad/Valladolid/14-17 Nov 11 3
    • Brief on Methods - Operational• If a member (or more) of a household had ever been a client of an MCI during 1990-2008, that household was considered as ‘ever borrower’ household and was treated as an element of the statistical population for the survey.• Multi-stage sampling, methodically retraced, allowed one to blow up sample results to population estimates• Poverty score cards allow one to estimate the net number of people crossing the threshold, not meant to track individual’s progress.• Three components of ever borrowers:- Current residents in non-metropolitan areas. Scorecard-based findings were fine- tuned with findings from life trajectory study- Those who had migrated out of the non-metropolitan areas, but had borrowed from MCIs during the period under study (1990-2008)- MC clients (new) in the metropolitan areas were left out of current exercise• Problems in finding the right scorecard – time and space? Sajjad/Valladolid/14-17 Nov 11 4
    • Sajjad/Valladolid/14-17 Nov 11 5
    • Study Findings• The survey finds two-third of the current non-metropolitan households to be ever borrowers. Of the first time entrants, on an average, 62 % were below the threshold defined by the $1.25 PPP. On the net, about 9.41% of the ever-borrowers currently residing in the non-metropolitan areas were found to have crossed the threshold.• It is estimated that the number of people who had migrated out during the 1990-2008 period is equivalent to 4.73% of the current population in the non-metropolitan areas. More than 55% of these households (current residents in metropolitan areas) took microcredit before migration. Urban surveys revealed that one-fourth of those households crossed the threshold.• Movement above poverty is not unidirectional and poor oscillate between below and above poverty. Almost 25% of those (62%) below the threshold at the time of entry into microcredit programs had crossed the threshold, while almost one-fifth of those (38%) above threshold slid below.• Movements across threshold was influenced by: (i) time of entry - early entrants were more successful, (ii) location - connectivity and proximity to urban centers provided greater opportunities. Generally, extent of client movements across poverty threshold had strong correlation with overall macro economic environment. Sajjad/Valladolid/14-17 Nov 11 6
    • Factors behind positive changes in life trajectory• Increase in earning members;• Increase in income generating assets (cows, van, rickshaws, boat);• Good business (mostly fish cultivation);• Good harvest/agriculture/ increased land cultivation;• Increase in income (job/diversified/change/additional job taken);• Lack of ‘shocks’ or events that involve a one-off expenditure;• Migration to Dhaka;• Dowry taken for male household members;• Migration abroad;• Separation of respondent from household;• Help from in-laws (for male household members) and family;• Government aid Sajjad/Valladolid/14-17 Nov 11 7
    • Factors behind negative changes in life trajectory• Treatment costs (illness, childbirth complications and then accidents);• Natural disasters (flood /storm/ heavy rain/ /river erosion/drought);• Wedding (including dowry) costs;• Loss in business; and/or bad harvest;• Separation of household (son leaving and establishing own household);• Increase in dependant members;• Difficulties with repayment;• Litigation costs;• Theft;• Death of earning member; Lack of work;• Inflation;• Death of cow; Loss in fish cultivation/ due to flood/storm;• Expenses to send son abroad; and fraudulence Sajjad/Valladolid/14-17 Nov 11 8
    • After thoughts• Poverty and microcredit: was it all about poverty reduction? Is there a need to be defensive?• Access to credit through innovation in service delivery – why confine to impact assessment?• Agency building and harnessing their potentials for poverty reduction• Changing politics of resource controls- Renewed interest to avail the traditional routes for trans-boundary flows- Traditional banking and the new technology• Strategic thinking for survival and beyond – did the MFIs miss the boat? Sajjad/Valladolid/14-17 Nov 11 9
    • Poverty Likelihood – individual vs aggregateEntry Average poverty 2009 % of hhs, % of hhs, Net %Cohort likelihood change in change in with base year plh >= 0 plh > 0 improvements (1) (2) (3) (4) (3)-[100-(4)]1992 60.67 49.64 63.7 63.4 27.1 (11.03)1996 73.27 53.86 71.5 71.5 43.0 (19.41)2000 55.48 57.48 44.4 44.4 -11.2 (-2.0)2005 58.93 58.12 69.2 46.6 15.8 (0.71) Sajjad/Valladolid/14-17 Nov 11 10
    • Poverty Likelihood (%), variations across time & spaceEntry cohort Entry year beg 2009 Entry year beg 2009 South/Southwest Central/North1992 52.75 48.63 61.37 44.471996 67.23 50.05 75.27 53.742000 49.87 50.73 55.30 58.102005 51.22 50.12 61.16 58.70 East Northwest1992 62.48 51.12 62.52 52.941996 80.74 56.48 70.81 55.092000 63.73 61.52 52.98 59.102005 66.18 64.29 57.77 59.21 Sajjad/Valladolid/14-17 Nov 11 11
    • Change in enrollment rates, 6-10 years ageEntry cohort entry year early 2009 entry year early 2009 South/Southwest Central/North1992 87.50 86.21 71.95 80.771996 84.38 90.14 78.13 83.182000 77.72 88.18 78.48 87.762005 81.11 89.19 77.99 85.32Division-level 81.04 88.76 77.35 85.48 East Northwest1992 63.64 81.48 57.63 82.611996 68.29 88.51 59.57 80.312000 80.68 86.57 72.48 78.572005 73.12 80.46 65.52 69.95Division-level 73.97 83.68 65.56 75.24 Sajjad/Valladolid/14-17 Nov 11 12
    • Taka Equivalence at PPPYear US$1_HS LPL_BBS UPL_BBS1991 12.83 14.34 16.961992 13.01 15.03 17.781993 13.72 15.72 18.611994 14.93 16.40 19.431995 15.98 17.09 20.251996 16.08 17.47 20.701997 16.90 17.85 21.151998 18.64 18.22 21.591999 19.07 18.60 22.042000 19.29 18.98 22.492001 19.63 19.93 23.612002 20.15 20.89 24.742003 21.05 21.84 25.862004 21.80 22.80 26.992005 22.77 23.75 28.11 Sajjad/Valladolid/14-17 Nov 11 13
    • Absolute Poverty (2122 Kcal/Person/Day) 1983-84 1985-86 1988-89 1991-92 1995-96 2000 2005National 62.61 55.65 47.75 47.52 47.53 44.30 40.40(million) 58.35 55.27 49.66 51.63 55.28 55.80 56.00Rural 61.94 54.65 47.77 47.64 47.11 42.30 39.50(million) 51.05 47.41 43.37 44.81 45.73 42.60 41.20Urban 67.70 62.55 47.63 46.70 49.67 52.50 43.20(million) 7.30 7.86 6.29 6.82 9.56 13.20 14.80 Sajjad/Valladolid/14-17 Nov 11 14
    • Hardcore Poverty (1805 Kcal/Person/Day) 1983-84 1985-86 1988-89 1991-92 1995-96 2000 2005National 36.75 26.86 28.36 28.00 25.06 20.00 19.50(million) 34.25 26.67 29.49 30.42 29.15 24.90 27.00Rural 36.66 26.31 28.64 28.27 24.62 18.70 17.90(million) 30.22 22.82 26.00 26.59 23.90 18.80 18.70Urban 37.42 30.67 26.38 26.25 27.27 25.00 24.40(million) 4.03 3.85 3.49 3.83 5.24 6.00 8.30 Sajjad/Valladolid/14-17 Nov 11 15
    • Indicator Value 91/2 95/6 2000 20051. How many household members were 20- A. Five or more 0 0 0 0 years-old or younger in <year>? B. Four 0 0 0 6 C. Three 10 0 9 6 D. Two 10 9 14 12 E. One 21 17 21 18 F. None 29 27 34 312. What was the highest educational A. No class passed 0 0 0 0 attainment by any household members B. Class 1-5, but cannot write letters 0 – – – in <year>? C. Class 1-5, but can write letters 5 – – – D. Class 1 – 0 0 0 E. Class 2 – 0 0 0 F. Class 3 – 0 0 0 G. Class 4 – 0 0 0 H. Class 5 – 0 4 4 I. Class 6 7 8 6 4 J. Class 7 7 8 6 4 K. Class 8 7 8 6 4 L. Class 9 7 12 6 4 M. SSC but not BA 12 – – – N. SSC/equivalent – 12 9 4 O. HSC/equivalent – 17 14 8 P. Bachelor’s degree or above 14 17 14 8 Sajjad/Valladolid/14-17 Nov 11 16
    • 3. What was the total operating A. No land; or less than 1.5 acres 0 0 0 0 land of the household in <year>? B. 1.5 acres or more, but less than 2(Total operating land = Cultivable 0 0 0 4 acres agricultural land owned C. 2 acres or more, but less than 4+ Dwelling-house/homestead 8 4 6 4 acres land owned+ Cultivable agric. land rented in D. 4 acres or more, but less than 5 8 10 6 4 /share-cropped in/mortgaged acres in– Cultivable agric. land rented out /share-cropped E. 5 acres or more 13 10 6 4 out/mortgaged out)4. Did you own any cows in A. No 0 0 0 – <year>? B. Yes 3 5 4 –5. Did you own any ducks in A. No 0 – – 0 <year>? B. Yes 5 – – 2 Sajjad/Valladolid/14-17 Nov 11 17
    • 6. What type of latrine was used in the A. Open field or unknown 0 0 0 0 house in <year>? B. Temporary 5 – – – C. Pacca (latrine with brick and cement) 15 – – – D. Hang latrine – 5 – – E. Pit latrine without water seal – 5 – – F. Latrine with septic tank – 10 – – G. Kacha latrine (temporary) – – 4 3 H. Kacha latrine (permanent) – – 7 5 I. Pacca latrine (pit) – – 9 5 J. Pacca latrine (water seal) – – 9 5 K. Sanitary – – 9 57. What was the material of the walls A. Others 0 0 0 0 of the dwelling house of head of B. Bamboo/hay/straw (or leaf, or hemp) 7 0 0 0 the household in <year>? C. Mud/unburned brick (kada/kacha 8 3 0 0 brick) D. C.I. sheet/brick/cement/timber (or 8 5 4 4 wood) E. Brick/Cement 8 8 4 88. Did your household have an A. No – 0 0 0 electricity connection in <year>? B. Yes – 10 4 4 Sajjad/Valladolid/14-17 Nov 11 18
    • 9. What was the material of the A. Others 0 0 – 0roof of the dwelling house of B. Bamboo/hay/straw (or hemp) 0 0 – 0head of the household in <year>? C. C.I. sheet/tali/timber (or wood) 3 4 – – D. Tile/ wood – – – 0 E. C.I. sheet/timber (or wood) 3 6 – 3 F. Cement 3 13 – 1010. What was the source of A. Ponds/ river water 0 – – –drinking water in <year>? B. Dug-wells/idara (draw-well) 0 – – – C. Tube wells 0 – – – D. Piped water 5 – – –11. How many bedrooms did the A. One 0 – – 0house have in <year>? B. Two 0 – – 2 C. Three 5 – – 3 D. Four 5 – – 5 E. Five or more 5 – – 9 Sajjad/Valladolid/14-17 Nov 11 19
    • 12. Did the household own a A. No – – 0 0radio or a two-in-one cassetteplayer in <year>? B. Yes – – 7 513. Did the household own a TV A. No – – 0 0in <year>? B. Yes – – 6 314. Did the household own a A. No – – 0 0clock in <year>? B. Yes – – 5 215. Did the household own a A. No – – 0 0wristwatch in <year>? B. Yes – – 3 316. Did any household member A. No – – 0 0work for a daily wage in <year>? B. Yes – – 4 6 Poverty scorecards for National Microfinance Survey of Bangladesh Source: Microfinance Risk Management, L.L.C., http://www.microfinance.com Sajjad/Valladolid/14-17 Nov 11 20