Measuring poverty levels is one of the most difficult tasks in microfinance; a lot of subjectivsism is involved because poverty is defined by a lack of a multitude of amenities and assets, each of which have a varying degree of impact on the lifestyles of individuals. For instance, consider two families – one of them has access to basic medical care, but is deprived of education, while the other has access to free health care yet has no food to feed their young. Which family is poorer?  This involves the use of personal opinion, which makes it difficult to monitor changes in poverty levels over large geographical areas and time periods, which microfinance institutions need to do as part of measuring their social performance.

Thankfully, one tool exists to accurately determine the poverty level of its clients, as explained in the video:

• Definition of poverty scoring (a simple and accurate tool to quantitatively measure poverty level of clients)
• Reasons microfinance institutions may use the poverty scoring tool
• Reasons funders may be interested in using ‘poverty scoring’.

Title: Poverty Scoring

Reference: (2010). Poverty Scoring. Available: http://www.microfinancepodcast.com/mfp-114-mark-schreiner-poverty-scoring-part-1/. Last accessed 15th Nov 2010.