Curuguaty is a Paraguayan town in the eastern department of Canindeyú. If you’ve heard of it—and few people have—it’s probably because Curuguaty’s mostly poor and rural population was the original subject of Fundación Paraguaya’s Poverty Stoplight—an innovative poverty measurement tool that has helped nearly 24,000 families overcome economic poverty. First launched in tiny Curuguaty in 2010, the Poverty Stoplight methodology has recently gone global.
Fundación Paraguaya, a partner of MetLife Foundation grantee Accion, was Paraguay’s first microenterprise development program when it was founded in 1985. The organization provided loans and training to help the poor strengthen existing jobs and create new ones. The program worked. But Fundación Paraguaya believes that new methodologies are needed to address seemingly intractable poverty issues.
So Fundación Paraguaya created the Poverty Stoplight by first identifying 50 poverty indicators and then surveying client families, plotting each family’s indicators against three color-coded categories—not poor (green), poor (yellow) or extremely poor (red). Because many clients were illiterate, the survey workers used photographs to illustrate possible responses. 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.
After completing the 20-minute, 50-question pictorial survey on a touch-screen device, 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).
When Benita Chaparro took the survey in 2012, her family fared poorly on indicators related to safe cooking and trash disposal, displaying yellow and red respectively in those categories. She prepared meals using firewood in a pit and burned their trash in her yard. Fundación Paraguaya surveyors realized that part of the reason was the Chaparros had insufficient knowledge about health hazards regarding these practices. They worked with the family, 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 proper ventilation, 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.” The family plans to put in concrete floors and build a laundry room. Not only has Benita’s family moved from red or yellow to green on most of their indicators, but their achievements have helped motivate other women in her solidarity group.
Fundación Paraguaya staff work with each family to develop a specialized package of services. Typically, the first task is to help the client develop a plan to increase income that might include a microloan for another family member or the option to become a microfranchise retailer. Beyond the individual family level, the Poverty Stoplight survey data also provides the baseline against which to measure each client’s progress in overcoming poverty. Finally, the data are georeferenced on a map and made available to NGOs and government agencies to implement health, education and other interventions.
The Poverty Stoplight methodology is based on four insights. First, poverty is about much more than insufficient income. Second, poverty doesn’t affect families uniformly; each family has a different set of poverty-related problems to resolve. Third, the main protagonists in eliminating poverty must be the poor themselves. Institutions, however farsighted or well funded, do not have sufficient insight into 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 sustain itself financially.
In the past two years, the Poverty Stoplight has expanded globally, with Fundación Paraguaya working to adapt the methodology to local contexts in collaboration with partners including UNICEF China, Heifer International, the Clothing Bank (South Africa), the Standard Microfinance Bank and American University of Nigeria, Women’s Global Empowerment Fund (Uganda) and Junior Achievement (Latin America), among others. Fundación Paraguaya is now working with 24 organizations in 19 countries.
This post originally appeared on the Wall Street Journal’s Multipliers of Prosperity.