Microfinance is generally about providing financial services to poor people, those who lack access to prevailing formal financial institutions. Many microfinance institutions, by working in rural areas or in poor urban neighborhoods, by providing small loans for activities that low income groups would normally engage in, by imposing specific conditions of borrowing such as seeking small regular repayments, ensure that the poor are served and the wealthy are excluded. However, many MFIs point out that without a more proactive identification of the poor, and especially the very poor and the more vulnerable, they would continue being systematically excluded from financial services. Hence the development of targeting tools and their use by MFIs focused on increasing the depth of outreach. The following are important targeting tools available to the industry.

The Housing Index An index using the structure of the house and sometimes the compound to differentiate between economic levels of households and identify those who are poor.

Participatory Wealth Ranking (PWR) A ranking by community members of the relative poverty or wealth of households utilising perceptions and criteria defined by community members themselves.

The Means Test A list of a small number of indicators collected through simplified household poverty surveys that are combined to create an index to give a reliable assessment of the poverty level of an individual household.

	Geographic Targeting Providing financial services to poor, vulnerable and excluded people through working in remote, unserved areas.