From Extreme Poverty to Sustainable Livelihoods

04 September 2014
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By focusing on the extreme poor, we hope to reduce entrenched, self-perpetuating inequalities that harm families across multiple generations . . . .

The Graduation Approach aims to move people out of extreme poverty and into a sustainable livelihood. Pioneered by BRAC in Bangladesh, the Approach combines elements of social protection, livelihoods development, and access to finance. The package of services includes time-limited consumption support (cash or food), the delivery of assets such as livestock, skills training, coaching, and access to saving services. Six randomized evaluations studied more than 21,000 beneficiaries of the Graduation Approach across Ethiopia, Peru, India, Ghana, Pakistan, and Honduras between 2007 and 2014. A year after the program ended, participants in five of the six countries had increased income, improved food security, increased asset holdings and savings, reduced stress levels, and happier lives as a result of the program. The Graduation Approach holds promise as a cost-effective strategy to help the poorest on a pathway to economic stability: many governments, donors and NGOs hoping are now adapting the Approach to scale it up.

This Technichal Guide distills lessons from the 10 CGAP-Ford Foundation graduation pilots implemented rom 2008-2014. We  plan to update this Guide in 2016 to incorporate new learning especially from the third-party implementers who have already started new pilots, or who will be launching their own programs using this year’s edition of the Guide as a tool.

To give feedback on this version of the guide, please join the discussion group on the CGAP Workspace or simply comment at the bottom of this page.

As you read the publication, please consider the following questions:

  • Are there any gaps in the content?
  • Which sections require further clarification?
  • Do you have an illustrative story that would help paint a clearer picture to readers?
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Comments

Submitted by cando cambodia on
this guide is very useful. cando is willing to replicate this graduate model in Cambodia. Sarim cando

Submitted by Simon, SISDO Kenya on
Very exciting piece of work. We would like to apply the model to graduate our clients ([email protected])

Submitted by Tina Cornely on
#9Steps2EradicatePoverty teaches the poor how 2 become self sufficient. These 9 steps are easy and use materials that are available to people living below the line. I hope that by incorporating these tips into your program we can make sure that the basic needs of people are met. Thank you for all that you do to help eradicate poverty!

Submitted by Dr.V.Rengarajan on
With the given skewed inequality and extreme poverty , among other approaches , it is only the graduation approach has certainly demonstrated the ways and means for helping bottom poor move into market economy. Thanks to BRAC-CGAP-Ford candid effort from the bottom pyramid. But there is much grass to water and wide gap between lab to land reflecting different dimensions of such gap The diagnosis on the existing gap reveals two formidable tasks ahead- How to reach 1.2 billion extreme requiring a diverse range of responses both in demand and supply sides in the given socio economic political and cultural settings? And how to empower these poorest in the pyramid? For challenging these issues, it merits attention various dimensions of the gap for discerning and working out strategies for the said tasks First, there is an advocacy gap at global level. There is an imperative need for making effective macro advocacy both at global and national levels. The multinational financial institutions like CGAP-WB need to promote the advocacy by changing their logo as “Advancing financial inclusion to improve the lives of the poorest” ( instead of the poor) and on similar vein, by financial/political authorities at national level. The rational for this argument is the term “Poor’ is more generic and commercial players in unethical market camouflage the bottom layer under this generic typology making them always remain excluded. Even MIX data also do not reflect the MF data extended to the poor and extreme poor distinctly . Second, Policy gap. Although there exists various social protection programmes both at global and country levels with the focus on the most vulnerable and deprived people , sequestered implementation without any coordination among finance and non finance inputs agencies both at national and sub national levels has not served its purposes effectively.. To wit harmonious integration of the inputs needed for these target groups hardly present resulting poor outcome. Third, Inclusion gap of 1.2 billion . there is a lack of proper and contextual identification methodology of extreme poor in different region in the globe. Inclusion is not inclusive enough in all sphere of growth and development . Mere insistence of financial inclusion of people who are also remaining excluded in other social protection programmes such as related to subsidized food, health, education , water & sanitation etc will not deliver intended outcome . Technology intrusion may likely widen the inequality as bottom extreme poor is hardly reached . All these inclusion programme need to have mandatory target for inclusion of these extreme poor . Fourth, Product and services gap arises due to lack of integrated pro poorest product and services ( non financial and financial) and lack of sequencing them as per the needs in each layer of poverty pyramid. One size fits for all approach particularly with micro credit alone is harmful There is also Inter departmental or stakeholders/institutional coordination gap albeit having common goal .This kind of coordinated approach need to be promoted as community of practice. Here, the role of local based community groups like SACCO,CACOBA, SHGs, ROSCAS etc also is to be encouraged and promoted in participating in the process of implementation of program intended for extreme poor at lower level . The last but not the least there is M&E Gap lacking result based M&E by local consultant in the respective area of operation Dr Rengarajan

Submitted by Melissa V. on
Dr. Rengarajan, thank you for your comments and key insights. I have also shared your comments on the dedicated CGAP Workspace and encourage you to register to join the discussion. Please follow the link provided above for more information on how to register on the CGAP Workspace.

Submitted by Clotilde Ekoka on
I have been learning about the Graduation Model Approach for about two years now. I still believe that other pilot countries need to implement it for experimentation: Cameroon is one of them. Cameroonian Microfinance institutions in rural and urban areas need to experiment the Graduation Approach to help eridicate poverty. How can you help us? (Email(s): [email protected][email protected]), Regards,

Submitted by Constance Motshabi on
Toberadicate poverty in Mpumalanga Kwaggafontein by teaching youth with Graduation Models Approach and other areas around South Africa as a whole.I have been reading about it and find interesting also for unemployment youth for them to have more knowledge and to alleviate poverty in most Communities

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