Review of Poverty Assessment Tools

As part of a Congressional mandate in the 2003 Amendment of the Microenterprise for Self-Reliance Act of 2000, USAID is responsible for developing low-cost methods for poverty assessment to be used by microenterprise programs. This Congressional mandate is timely, corresponding to a growing concern in the microenterprise industry about its success in reaching the poor. USAID wants to ensure that support for microenterprise programs conforms to their poverty alleviation priorities. Practitioners want to know whether they are achieving their program objectives and how to improve their services. The challenge is to develop a tool that can serve both purposes in a practical and cost-effective manner.

This paper review current practices in poverty assessment, both at the conceptual and at the practical levels. It provides an overview of benchmark surveys to be used to field test shortcut poverty assessment methods as well as what poverty assessment tools are currently in use by microenterprise practitioners.