Poverty scorecards: lessons from a microlender in Bosnia-Herzegovina

Type Journal Article - Microfinance Risk Management
Title Poverty scorecards: lessons from a microlender in Bosnia-Herzegovina
Author(s)
Publication (Day/Month/Year) 2004
URL http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.67.7516&rep=rep1&type=pdf
Abstract
How poor are participants in development projects? This paper analyzes how well a simple scorecard identifies poor clients at a microlender in Bosnia-Herzegovina (BiH). The scorecard effectively ranks clients by relative poverty and also identifies the likelihood that a client is poor by an absolute standard. The score tracks poverty more closely than loan size, microfinance’s traditional poverty indicator. Overall, poverty scorecards are a simple, inexpensive way for microlenders—or any other development entity—to target the poor, track changes in poverty over time, manage poverty outreach, and report on clients’ absolute poverty.

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