Adapting the Graduation Model to Reach Indonesia's Ultra Poor

In 2013, as the program implementer, Ministry of Social Affairs conducted a census of the beneficiaries of the Program Keluarga Harapan (PKH), the conditional cash transfer (CCT) program, and found that many beneficiaries of the cohort that was supposed to roll off the CCT program that year was still extremely poor. This made us want to test something new to put those about to roll off the CCT on a pathway to economic stability.

When we learned about the Graduation Approach, we decided to test and adapt the model to our Indonesian context. We started with 1,130 groups of 10 people in 2013, then 3,352 groups in 2014. We were hoping to reach about 4,240 groups in 2015, when a cut in fuel subsidies partly was re-allocated to support in total 14,740 new groups this year!

We are testing the pilot in both rural and urban areas, targeting mostly women in the households that have received the CCT for over 6 years. In 2013, the focus of the pilot is to evaluate the process implementation to provide recommendations for improving the set-up of the program. In 2014, we have designed a quasi experimental impact evaluation and collected baseline data comparing targeted regions to similar but non-targeted areas.

Background on the pilot

We are building on KUBE, a pre-existing business entrepreneurship program in place since 1983. KUBE requires the poor to get together in groups of 10 to start a group business. They develop a business plan and the government then transfers about 2,000 USD worth of business capital to help jump-start their activity. Each group is coached by a facilitator that has facilitate them in the conditional cash transfer program so that the facilitators know the members well. The facilitators received additional training in order to be able to coach the business group. The aim is for groups to meet monthly over a period of three years.

In addition to the KUBE business component, each member of the group continues to receive the PKH cash transfer for an additional three years – the CCT amounts to about 300 USD per year depending on pregnancy, number of under 5 children, number of school-aged children, etc. Participants are also encouraged to save in their groups bank account and also encouraged to save some amount of money for group social fund for helping members in need. They receive scholarships for their school-aged children, health insurance for all members of the family, and access to a subsidized rice scheme. They can get 15kg of subsidized rice per month.

All these elements are pre-existed. All we did is bring them together and modify a human touch through the coaches who will support the participants over three years and establish a regular monitoring system. Prior to KUBE PKH, KUBE has only coaching components for 6 months.  We thought the coaching and monitoring system were critical to reinforce the coherence of the program. In addition, as the program is conducted at the nation-wide scale, we understand that it is challenges to conduct skill trainings for the beneficiaries, we recently establish a web-based learning center for the facilitators and beneficiaries.

Biggest challenge so far

By far the biggest challenge for us is to bring together all the various components of the Graduation-like package and “blend” them together. Most activities are housed under the Ministry of Social Affairs, but some aren’t. The scholarship program is with the Ministry of Education, the health insurance lies with the Ministry of Health. Although it’s a challenge to coordinate such a holistic program, we think providing these elements jointly will accelerate people’s welfare – the sum becoming greater than the parts!

Lessons learned and to learn

We would like to learn more about success stories of other governments implementing the Graduation Approach. We are particularly interested in sharing with other countries, like Brazil or Peru, who have brought together different pre-existing government interventions to create a similar package to ours. We are also interested to learn from countries like India where the State is partnering with NGOs to deliver some components of the approach.

Most exciting part of the work

We recently put a huge effort into constructing a national unified database. We have advocated for it to be used systematically across ministries to enhance cohesion among various social protection interventions. We have the information about the poorest 40% of Indonesian families by name and address. This is our main asset in distributing a coherent package and making sure the poorest people are prioritized for economic inclusion efforts also benefit from national initiatives to foster access to healthcare and education.