Graduation into Sustainable Livelihoods: What’s in a Name?

As we travel around the world gathering and sharing insights from implementation, impact findings, and the new generation of graduation programs, we find that the term “graduation” is often misunderstood. At times, this leads to confusion about the approach as a whole.

When CGAP partnered with the Ford Foundation more than a decade ago in an initiative to test and adapt BRAC’s Challenging the Frontiers of Poverty Reduction/Targeting the Ultra Poor approach, we needed a simple term to describe the strategy to help the poorest on a pathway out of extreme poverty. The term “graduation” was adopted because it implies moving people beyond an inflection point, where the likelihood of slipping back significantly decreases. We came from the world of financial inclusion and felt the benefits of graduation’s fully integrated and sequenced set of interventions could best be sustained by moving people into mainstream financial services.

But this vision was too narrow to reflect the full potential of what the approach could do. So we broadened our perspective to see “graduation” as breaking not just the market failure in financial services, but also enabling the poorest to better access new livelihoods and even small business opportunities and employment, as well as accessing the broader range of social protection programs.

Hence “graduating” refers to households leading economically viable livelihoods that increase their incomes, make them food secure throughout the year, and allows them to access financial services, seek schooling and health care facilities, and generally get them beyond the extreme poverty line. Of course these “graduation” criteria are contextualized and concretized based on regional differences and the specific conditions creating and maintaining extreme poverty.

Graduating is also about creating the enabling conditions—confidence, knowledge, skills, and linkages to public and other services—that allow for continued, sustained upward mobility. Relevant issues include malnutrition, health, children's education, wider occupational choices and women's agency. For this, of course, extreme poor households need to link up with other social protection elements, such as health care, schooling, or insurance.

New wave of Graduation: Graduation 2.0

Woman smiles with her children and goats, India | Photo Credit: Papu Banerjee, 2015 CGAP Photo Contest Woman smiles with her children and goats, India | Photo Credit: Papu Banerjee, 2015 CGAP Photo Contest
Photo credit: Papu Banerjee, 2015 CGAP Photo Contest

As the “graduation” agenda gains traction, the new generation of program designs offers an exceptional opportunity to learn how we can sustainably reduce extreme poverty at scale. New programs’ innovations and adaptations may allow for similarly strong impacts while lowering the costs of the first generation of graduation inputs.

While interventions differ, here’s a core set of characteristics new programs have in common:

  • They deliberately try to reach the extreme poor, either those under the $1.90-per-day line and/or those identified as the poorest and most marginalized within their own communities;
  • They are holistic in order to tackle the multifaceted constraints of extreme-poverty;
  • They are financially inclusive. Although the access-to-finance component might not be as critical when participants first enter the program, we expect the research underway will likely show that access and usage of appropriate financial services is crucial to deepen economic inclusion and continue upward progress; and
  • They offer a “big push” based on the idea that a large investment will really make a meaningful change.

We need to learn just how big the “push” needs to be to achieve strong impact at lower costs. We are also trying to learn if the “extreme poor” can be further sub-categorized. Some amongst them, the “slow climbers”, will need more time and more intensive assistance.  Others, the “fast climbers”, could probably do with a less intensive and therefore less expensive set of inputs. They could possibly even “graduate” in a shorter timeframe.

The Graduation into Sustainable Livelihoods Approach is just one pathway to addressing extreme poverty.  Employment, for example, is another critical pathway. And hence private sector and public sector job creation initiatives (including pro-poor fiscal policies) should be actively encouraged. We also recognize that the national contexts pose great challenges for massive replication of graduation programs since underdeveloped markets impose limits to employment opportunities and demand for microbusiness products, natural disasters and ecological hazards disrupt lives and livelihoods, supply side constraints in schooling and health care deny people the opportunity to educate children and the right to medical services, and political instability and violence can rapidly undermine any development intervention.

That said, if the graduation approach can be scaled, it has proven its potential to provide a successful model for economic inclusion and to become an integral component of many national poverty reduction strategies.  

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A 2015 article in Science explains The Graduation Approach, a comprehensive method for improving the lives of the ultra-poor, boosts livelihoods, income, and health.

This Technical Guide serves as a how-to manual for others seeking to implement the model piloted by the CGAP-Ford Foundation Graduation Program.


16 June 2016 Submitted by Anne Hastings (not verified)

Thank you, Aude and Hashemi, for starting this conversation. It is critically important that we continue this dialogue because there is a lot of confusion about the term "graduation" out there. I'm not sure that I agree that the four bullets are both necessary and sufficient, but I congratulation you on the effort. As you might expect, based on my experience, I believe some type of "coaching" is necessary and while coaching could be included in "holistic", it would not necessarily have to be. So we need to clarify exactly what we mean by "holistic". How much is enough? And, as you mention, how big does the "big push" have to be? I'm also concerned about the first bullet. If you go with just those identified as the poorest and most marginalized, but you're working in a relatively wealthy community, you might end up with no one who could be classified as extremely poor. So I would want the "and/or" in the first bullet changed to "and". Bravo for the effort! Let's keep talking, and see if we can't finally pin this down.

17 June 2016 Submitted by Tom Sanderson (not verified)

Thank you. Great summary and reminder of these effective programs. Your final para says "IF the graduation approach can be scaled". This is a big challenge since the "big push" is expensive. I'd like to suggest that BRAC and others consider adding a media component to the approach - especially around the training and mentoring - to allow scale and reduce average costs. This could be a radio, TV or mobile communication platform, to help support implementation, knowledge transfer, adoption and behaviour change. BBC Media Action has extensive experience in this field and maybe we could co-design a suitable pilot intervention in one country context.

21 June 2016 Submitted by Aude (not verified)

Dear Anne, Thank you for your thoughtful comments--as always. Agreed that some form of coaching is critical: we are following up closely on new 2.0 program efforts to deliver e-coaching, peer-to-peer or group coaching in order to reduce the costs of this important component.

21 June 2016 Submitted by Tatiana Rincon (not verified)

Dear Aude and Hashemi. Thank you for initiating this dialogue. I also find that the term “graduation” is often misunderstood. Very often people believe that it refers to one of its possible definitions: overcoming extreme poverty. Considering the multidimensional aspect of poverty, and not its income-based conceptualization in which overcoming poverty means crossing an income threshold, it becomes clear that graduation programs alone are incapable of lifting people out of poverty. Graduation is not an isolated concept. In fact, its success is heavily dependent on a country’s social policy and social protection system, macroeconomic context, market opportunities, the environment (natural disasters and climate change), and even on the participants’ household conditions (i.e.: access to water and public services; human, natural and physical assets, etc.).
I feel more confortable with a "graduation into livelihoods" approach, referring to the strengthening of productive, financial, human and social assets of people living in extreme poverty, in a manner that allows them to be auto-sufficient, capable of resisting small shocks (resilience) and continuing on the path to development on their own terms. In other words, is one pathway for passing from social protection to promotion policies.
Additionally, besides the core set of characteristics that you mention, I believe that Graduation 2.0 also involves working with governments linking with existent social protection programs.

29 June 2016 Submitted by Ian Orton (not verified)

Dear Aude and Hashemi, good article. Well done. Just one question. What evidence is there of graduates actually taking up the broader range of social protection programmes, as is suggested in the third paragraph? Is there actual empirical evidence of this or is that assumed? Or are you reasoning that would be a natural outcome that will occur over time? Might the current formulation be an overstretch at this point in time? Look forward to hearing your clarification. Thanks. Ian

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