In financial services, inclusion is often measured through access milestones: the number of accounts opened, loans disbursed, or branches expanded. Yet such metrics only tell part of the story. Access statistics don’t show whether people’s lives are actually improving or whether these new services have a tangible impact on those they’re meant to help. Ignoring impact while celebrating ‘inclusion’ is at best a job half-done at worst an arguably fruitless exercise.
Access versus impact
There’s an important distinction between access and impact but too often the two are blurred. Access, such as increasing the number of bank accounts opened, is an input, but impact (for instance, the number of people living below the poverty line) is an outcome. However, many in financial services are treating these inputs as the end goal, measuring success by the services they set up and mislabelling inputs as outcomes. This muddying of terms means the effects of inclusion efforts aren’t properly examined; a dangerous and wasteful result that divorces action from responsibility.
If we want to learn how inclusion efforts are shaping people’s lives, we need to zero in on impact. This means examining who is benefitting from services and how outcomes are distributed among different demographics: for example, among women, youth, or those in rural areas. It means shifting the focus from reporting what was done, to demonstrating what changed; measuring success by the outcome and not by the input.
Data is the next frontier in financial inclusion
Central to this shift is exploring new ways to assess impact. One such way is by using the Poverty Probability Index (PPI) as a metric: a validated, 10-question, country-specific poverty measurement tool, maintained by Innovations for Poverty Action, that estimates the likelihood a household lives below a chosen poverty line.
The PPI is built from national household survey data and is used by hundreds of organisations globally, including ourselves, to allocate resources and track progress. When combined with behavioural and portfolio signals, it enables organisations to refine pricing, tenors and service models for different client segments, as well as signalling when to layer in non-financial services (such as around financial literacy or agri-extension) for the clients who are most at risk of falling behind. It’s not about labelling people, it’s about making sure products and capital are reaching those who need it most.
Measurements like PPI are critical in helping organisations monitor whether financial products are affordable, sustainable, and truly effective for low-income customers. Additionally, they provide a framework for greater governance and accountability, helping microfinance providers meet the industry's Universal Standards for Social and Environmental Performance Management, which calls for client-centred strategies, monitored outcomes, and responsible growth. A recognised poverty measure, like PPI, helps organisations fulfil these requirements while aligning them with investor expectations on consistent, evidence-based impact.
The business case for measuring poverty
Focusing on impact over access is crucial in meeting ethical standards and building investor confidence; ensuring cost of funds is aligned with the value created, but these aren’t the only arguments in the business case for measuring poverty. PPI allows organisations to gain segment-specific insights that help them fine-tune product features, reduce drop-outs and improve client retention, especially among first-time borrowers.
In-depth understanding of client vulnerability is also essential in building effective early-warning systems and hardship protocols to better serve clients when shocks hit. These features both strengthen portfolio quality and allow an organisation to offer a higher level of client protection. All these benefits are yet another demonstration that ethics and smart business strategy don’t have to be opposed.
Switching the focus from access to impact is a small but incredibly powerful move. It means attention is clearly trained on clients’ real needs, not what sounds good in a press release. Comparable, verifiable outcome data is a crucial tool in breaking poverty cycles and ensuring services are as effective as they can be.
By Jonty Rawlins, Director of Sustainability at Platcorp Group, on Finance Derivatives pg 44 - 45