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With the right mix of interventions, the poorest can ‘graduate’ out of extreme poverty – 3ie-LIDC seminar with BRAC Development Institute and CGAP

The seminar ‘Reaching the Poorest: Lessons from the Graduation Model’ in the 3ie-LIDC series ‘What works in international development’ examined lessons to be drawn from the Graduation Model, a holistic approach to tackling extreme poverty currently being tested in eight countries in a variety of contexts based on an original model developed by  BRAC in Bangladesh.

Dr. Syed Hashemi, Founder and Director of BRAC Development Institute and Senior Advisor to CGAP, explained that microfinance rarely reaches extremely poor people. Most approaches either lack the notion of a ‘ladder’ (progressive climbing out of poverty) or do not adequately focus on sustained changes in people’s lives beyond the end of programme. One model that successfully links the notion of a ladder and microfinance interventions to safety nets and social protection is  BRAC’s Targeting the Ultra Poor (TUP) programme in Bangladesh.

In 2006, CGAP and the Ford Foundation launched an initiative to test and adapt BRAC’s approach in various other contexts. The result of this is the CGAP-Ford Foundation Graduation Program, a series of 10 pilot projects in eight countries in partnership with 10 organisations.

The model rests on five pillars:
1.    Targeting (to make sure that the intervention reaches the poorest, as defined in the local context);
2.    Consumption support (to eliminate food insecurity which hinders people’s ability to pursue opportunities);
3.    Savings (to build resilience against crises, teach financial discipline and help invest in simple economic activities);
4.    Asset transfer (to help start an economic activity, often in the form of cash or agricultural inputs, such as seedlings or livestock);
5.    Skills training and coaching (the training covered financial literacy and business planning, but also focussed on transmitting wider messages, e.g. around nutrition and hygiene; weekly visits by programme staff helped monitor progress and support participants).

The pilot studies employed a range of methodologies to test the BRAC model in eight countries and see ‘what works’: monitoring, Randomized Control Trials (RCTs), impact assessments and qualitative research. RCTs are being used to establish causality, while qualitative studies establish context and give a fine-grained analysis of the ‘process’ by which change happens.  

Aude de Montesquiou, Microfinance Analyst, CGAP, presented the draft results of RCTs in West Bengal and in Andhra Pradesh, India.

The draft results in West Bengal were very positive:
•    25% increase in food consumption;
•    Participants saved on average twice as much as the control group;
•    There was an increase in health knowledge, although no changes in actual health outcomes;
•    Children spent more time caring for livestock, but also more time doing homework.
Results in Andhra Pradesh were less positive, with no noted increase in consumption and no impact on children’s schooling. On the plus side, however, participants reported less borrowing from money lenders and were more likely to save.

Anasuya Sengupta, Senior Research Associate, BRAC Development Institute, talked about the qualitative research conducted in multiple pilot sites that has contributed towards  a fine-grained understanding of extreme poverty and the process of change in the Graduation Program.  A truncated life histories methodology was adopted to track the lives of a small sample of participants, as well as interviews with programme staff and other relevant stakeholders. The studies identified several participant profiles, notably slow and fast climbers, with success factors being, among others: previous experience, pre-existing labour resources, family and social networks, number of dependants, etc. The research established that extreme poverty is characterised by intersecting constraints. To build long-term resilience it is not enough to transfer assets – these need to be coupled with training, coaching and savings opportunities. A strong advantage of the programme is when it creates linkages with other actors, for instance local health providers.

The discussion that followed covered aspects such as the cost of the programme, targeting (criteria for inclusion in the programme and indicators of ‘graduation’), role of an enabling environment in climbing out of poverty, universality of conclusions and sustainability.

Additional resources

Download the presentations:
1)    Syed Hashemi and Aude de Montesquiou (pdf)
2)    Anasuya Sengupta (pdf)

Listen to the podcast
Download the vodcast (slides with voiceover)
More about the Graduation Program and pilot results

3ie-LIDC Seminar Series

The 3ie-LIDC seminar series ‘What works in international development’ has been running on a monthly basis since January 2011, attracting a large and diverse audience of academics, policy-makers and development practitioners. It explores key issues in impact evaluation of development interventions.

The next seminar in the series will take place on 23 May 2012: ‘Financial Incentives in Health - New Evidence from India's Janani Suraksha Yojana’, with Timothy Powell-Jackson, London School of Hygiene and Tropical Medicine, and Oxford University. More

More about the 3ie-LIDC seminar series