Poverty Scorecards: A Tool To Prioritize Public and Private Investments for Development

The importance of credit access to improve economic opportunities in developing countries is well established in the literature and generally recognized by policymakers. However, in lending and extending grants for development projects, donors (both public and private) are often hesitant because projects with a higher poverty-reducing potential can also be riskier. IFPRI has developed an innovative poverty scorecard system that combines both a risk and a poverty scorecard to address the potential trade-off between sustainability and poverty targeting. The scorecard approach goes beyond the standard poverty-targeting approach by helping donors choose from loan or grant applications based on both the chances of project survival and their poverty reduction potential. The scorecard system is currently being implemented in El Salvador, Guatemala, Honduras, and Nicaragua.

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