The Poverty Stoplight: Putting Poverty on the Map

How we can use data to not only analyze poverty, but work toward eliminating it.

Curuguaty is a Paraguayan town in the eastern department of Canindeyú. If you’ve heard of it – which you almost certainly haven’t – it’s probably because its population, which is poor and mostly rural, has been surveyed and plotted on a map using Accion partner Fundación Paraguaya’s color-coded ‘Poverty Stoplight,’ an innovative poverty measurement tool that has helped over 18,000 families overcome economic poverty since the program began in 2010.

Fundación Paraguaya is a nonprofit social enterprise in Paraguay that is focused on using microfinance, education, and more innovative methods (including this Poverty Stoplight) to eliminate poverty in the country.

The Poverty Stoplight operates on the notion that, in order to truly make a difference in eliminating poverty, you have to first understand it. Fundación Paraguaya founder Martín Burt realized that every poor client he served was poor in his or her own way. The tricky part was to understand the ways in which each family is poor, define what it means for these individuals or families to be not poor, quantify all of that, qualify it, and then come up with an exit strategy.

Burt and his team organized 50 poverty indicators, such as jobs and access to water, into six dimensions:

1) Income and employment
2) Health and environment
3) Housing and infrastructure
4) Education and culture
5) Organization and participation
6) Interiority and motivation

Poverty-Stoplight-fundacion-paraguaya-accion-blog-Cristina-Rios_Pacheco-client-loan-officer-Luque-Paraguay
Cristina Ríos Pacheco takes Fundación Paraguaya’s Poverty Stoplight survey with her loan officer in Luque, Paraguay

They also identified three conditions for each poverty indicator (not poor, poor and extremely poor), and assigned to each the corresponding colors — green, yellow and red. A photograph was included to represent each condition in the local context, since many of those surveyed were functionally illiterate. For example, to represent the three possible conditions for access to water, the survey respondent could look at a picture of a woman carrying a bucket of water on her head (extremely poor), a well outside her house (poor) and a faucet at home (not poor), and quickly identify which photograph best represented the family’s situation.

Burt explains that the approach of his Poverty Stoplight incorporates the following four propositions:

First, poverty has many more dimensions than insufficient income.

Second, poverty doesn’t affect families uniformly; each family has a different set of poverty-related problems to resolve in order to overcome poverty.

Third, the main protagonists in eliminating poverty must be the poor themselves. Institutions, however far-sighted or well-funded, do not have sufficient insight into the poverty-related problems of individual families or sufficient resources to permanently eliminate poverty on their behalf.

Fourth, a poverty-elimination strategy must be scalable, which means that it must cost very little to implement and, ultimately, must be financially self-sustaining.

After completing the 20-minute, 50-question pictorial survey on a touch-screen device (developed pro bono by Hewlett-Packard), clients receive a one-page report that summarizes in ‘heat map’ fashion the areas in which the family is extremely poor (red), poor (yellow) and not poor (green).

Poverty-Stoplight-fundacion-paraguaya-accion-blog-cell-phones-paraguay

Fundación Paraguaya’s staff then works with the client’s family to develop a specialized package of services to address their specific poverty-related problems. Typically, the first task is to help the client develop a business plan to increase per-capita income above the national poverty line ($3.5 per day per member of a household in Paraguay). That might include a microloan for another family member or the option to become a microfranchise by selling certain products, such as reading glasses and over-the-counter pharmaceutical products, which Fundación Paraguaya is working to turn into client microfranchise opportunities.

The data from the survey also provides the baseline against which to measure each client’s progress in overcoming poverty. Finally, the data are geo-referenced on a Google map and made available to NGOs and government agencies to implement interventions such as vaccination events, blood pressure screenings, or getting a free wheelchair to a person in need.

This level of coordination happened in Curuguaty.

Poverty-Stoplight-fundacion-paraguaya-accion-blog-map-paraguayA screengrab of the Poverty Stoplight map developed by Fundación Paraguaya.

Putting Curuguaty on the Map

Tablets in hand, Fundación Paraguaya staff canvassed the outskirts of Curuguaty to administer the Poverty Stoplight to hundreds of residents. One of them was Benita Chaparro, who, along with her husband, was supporting their 13-year-old son on her small income as a housekeeper. Benita is a member of one of Fundación Paraguaya’s 2,600 all-women solidarity groups participating in a program called ‘Mujeres Emprendedoras’ (Entrepreneurial Women). The groups access small loans from Fundación Paraguaya and learn business and entrepreneurial skills such as self-management, budgeting, and leadership using Junior Achievement’s model.

Poverty-Stoplight-fundacion-paraguaya-accion-blog-Benita-Chaparro
Benita Chaparro, client of Fundación Paraguaya, procured a stove, a sink, and running water as a result of the Poverty Stoplight program.

When Benita took the survey in 2012, she fared poorly on indicators related to safe cooking and trash disposal, earning yellow and red respectively in those categories. She prepared meals using firewood in a pit and burned their trash in her yard. Fundación Paraguaya staff asked why that was the case and realized that part of the reason had to do with lack of motivation and insufficient knowledge about health hazards. They worked with her on that, eventually convincing Benita’s husband to use his construction skills to build an elevated stove. That was only the beginning.

Today, Benita has a kitchen with a stove, a sink, and running water. “These changes have lifted my spirit,” she says. “When I go to bed I think about this accomplishment and feel happier and more rested because of the comfort these things have given me.” The family plans to put in cement floors and build a laundry room. Not only has Benita’s family moved from red and yellow to green on most of their indicators, but their achievements have helped motivate other women in her solidarity group. “It’s important to have goals,” she explains. “At first the work seemed daunting, but then we got motivated and now it’s a reality.”

In 2011, Fundación Paraguaya’s Poverty Stoplight helped 6,400 families like Benita’s (an estimated 32,000 people) raise their income above the national poverty line. In 2012, they helped an additional 6,000, while enabling 600 of the 6,400 families from 2011 to transform all the indicators in their report from red or yellow to green, indicating that they had overcome poverty in all its dimensions. During 2013, 6,160 families overcame poverty with respect to income (totaling 18,590 families for the period 2011–2013) and 1,057 overcame poverty with respect to all 50 of Fundación Paraguaya’s indicators (totaling 1,662 families for the period 2012–2013.)

“If 92,000 people have been lifted out of poverty by their own efforts,” writes Burt, “how much more can be accomplished if society as a whole makes a concerted effort?”

Yes, Mr. President

Luis Fernando Sanabria took over Fundación Paraguaya in 2012, after Burt was invited by President Federico Franco to join his cabinet as chief of staff. Burt, no stranger to public service – he spent a term as mayor of Paraguay’s capital, Asunción – stepped down from Fundación Paraguaya to serve his country. He would eventually find a way of raising the Stoplight to the highest levels of government.

“Before the adoption of the Stoplight,” says Sanabria, “Fundación Paraguaya was the smallest microfinance organization in Paraguay, with 9,000 clients. Since we’ve changed our focus, we’ve grown to 57,000 clients.”

In December 2012, Paraguay’s national government launched its Private-Public Partnership Action Plan to Eliminate Extreme Poverty by 2018. Burt’s Stoplight became a major component of the policy. It was used to design a strategy to map 1.2 million people living in extreme poverty in 400 rural villages, 1,000 urban slums, and 116 indigenous settlements. The Stoplight also provided a methodology that enabled more than 1,500 local businesses to sponsor one extremely poor village or settlement in their community, thereby becoming the designated liaisons between government agencies that provide services and the community represented by each business.

Beyond Paraguay

Burt wants more. “The truth is that, just like David against Goliath, we want to demonstrate to the microfinance industry that [the Stoplight] is a platform that needs to be used for the eradication of poverty at an international level.”

And he’s working on it. Burt has partnered with ProMujer and the BBVA Foundation to help bring his Stoplight to Mexico. Organizations in Nigeria, Tanzania, and Uganda are asking Burt to localize his Stoplight in their respective countries. (He’s looking for financial support for that.)

“Our objective is to transcend what we’ve done so far, which is fighting and alleviating poverty, to eliminating it. We want to go from financial inclusion to poverty eradication.”

Burt is leading by example. The question is, what will it take to get others to follow suit?

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