Measuring the evolution of client vulnerability: innovation at the BBVA Microfinance Foundation

BBVA Microfinance Foundation implements a unique approach to measure client-level outcomes, systematically generating data from field interactions and building a centralized dataset for the universe of clients of six institutions in five countries. From a knowledge-intensive microfinance perspective, BBVAMF focuses on developing personalized, long-term client relationships, and compiles augmented “relationship histories.” These histories, consolidated in a longitudinal dataset, enable tracking of poverty and vulnerability status for each individual client, assessing screening-tools efficacy, and describing outcomes distributions for the universe, cohorts, or segments of the clientele. The purpose is not claiming attribution for client-level impacts but learning lessons - from measurable outcomes - about client services suitable for their growth. Absence of mission drift and how borrowers escape poverty as relationships mature are highlighted. All indicators (sales, assets, surplus) improve with each loan cycle. The poorer the client, the gains are greater, so inequality among BBVAMF borrowers declines. Covid-19 impacts on outcomes are sketched. Surplus elasticities with respect to loan amounts are higher for women than men and justify a gender focus for a poverty-alleviation institution.