The Graduation Programs

In 2002, the BRAC Development Institute developed a poverty Graduation Program with an innovative and holistic approach in Bangladesh called Challenging the Frontiers of Poverty Reduction / Targeting the Ultra Poor (De Montesquiou et al., 2014). To date, the program remains and its track record has fostered enough confidence in its results. The stakeholders included the Ford Foundation and CGAP (Consultative Group to Assist the Poor), which, between 2006 and 2014, undertook the ambitious task of proving that the BRAC experience could be replicated (Sheldon, 2016).

The good results found by Ford Foundation and CGAP (Banerjee et al., 2011; Banerjee et al., 2015), along with the positive results that continued to be observed from Bangladesh, especially on the permanence of the effects (Bandiera et al. , 2013;. Bandiera et al, 2015), seemed to provide sufficient evidence that the program was scalable and sustainable. Thus, the promotion of scaling these programs to the already defined task of the universalization of results, was added to its objectives. Governments were quickly defined as the essential ally for this task. The Ford Foundation, CGAP and its allies conducted 3 years of funding and technical support to reach donors and policy makers from 24 developing countries (Sheldon, 2016).

“As of September 2016, 58 Graduation projects were in operation, an increase of 30 percent since December 2015.”
“One third of ongoing Graduation projects are implemented by governments …”
Sheldon, 2016

Graduation Programs Components

 

The theory of change for both, the original design of BRAC and the adaptations made by the Ford Foundation and CGAP, underlies that the right combination of interventions offered in a proper sequence, could allow the ultra poor households to create sustainable livelihoods and "graduate" from poverty. The interventions or components including the graduation programs are: (1) consumption assistance, (2) access to financial services, (3) training, (4) seed capital, and (5) mentoring.

 
Mentoring The mentoring corresponds to a periodical and lasting support of participants where the construction and promotion of life skills is encouraged. This component is intended to allow the participant to build the confidence and the persistence required for an effective "graduation" from poverty. The mentorships are present in 85% of the implementations, with less presence in the programs implemented by governments.
Seed capital The component seeks to transfer part of the resources required to implement a productive activity, previously selected from a group of viable activities or the one that has been worked on with the participant during trainings and mentorships. This component has been present in 93% of the implementations to date, and may be in the form of cash resources (cash or electronic transfer) or in kind (CGAP, 2016). Some implementations include the offer of jobs instead.
Training The technical training component seeks to provide an accompaniment to a productive activity, in general the same that is being promoted by the program. Some of the implementations also seek to include cross-cutting skills to all productive activity such as the preparation and registration of accounts and budgets, as well as the definition of markets, among others. This component is more important in the programs implemented by NGOs and donors (97% and 86% of the programs implemented by these institutions) and less present in government programs (72% of them).
Access to financial services It is intended that participants gain access to and knowledge of the financial sector as well as increasing their savings levels, so that financial services are identified as a central tool for risk management (Hashemi et al., 2016). Ninety percent of graduate programs include this component, using different strategies such as promoting savings groups (66%). Additionally, it is common that this component be supplemented with interventions for financial literacy or connections to the formal banking system.
Duration The duration of the programs, their implementation period, is highly contextual so there are important differences. BRAC (Dharmadasa et al., 2015) recognizes that the implementation takes between 18 and 24 months, while CGAP (Montesquiou et al., 2014) considers durations of up to 36 months. Several researchers have argued that a duration of 24 months is more appropriate for the graduation process.
Consumption assistance Consumption assistance seeks to relieve restrictions on food, either through a food assistance or a money transfer program, and reduce the effect of food insecurity on productive decisions of households (Hashemi et al., 2016). seventy eight percent of Graduation Programs include this component, most of them through cash resources (55% of graduate programs), and electronic payments (19%) (CGAP, 2016). Consumption assistance is associated with cash transfers (conditional and unconditional), in countries where this is a possibility.
Market/value chain analysis Analysis is a fundamental exercise, which must be carried out prior to defining the assets to be transferred or the initiation of the transfer itself, based on what is determined in the program design. Sheldon (2016) highlighted that it is a very important component for scaled cases or those in a scaling process; yet its presence is not clear in all the programs implemented.
Targeting Within the processes of the Graduation Programs, is certainly one of the most dynamic elements. BRAC contemplated that the basic scheme would be implemented in ultra-poor populations, as a way to help a highly marginalized groups that enjoy very low participation in other social programs because its inherent difficulties in achieving their access. Now the Graduation Programs include a broader group of beneficiaries (BRAC 2016), which includes not only people living in extreme poverty, but also those living in other states of vulnerability such as indigenous groups (31% of programs), conflict victims (9%), young (18%), people with disabilities (22%) and elderly (9%). Likewise, new implementations have explored the geographical scope of programs, not limiting to rural areas but also considering urban and peri-urban areas.

What do we not know?


Which is the best way to guide and support the scaling up process with governments?

After defining governments as fundamental and strategic partners in order to scale the Graduation Programs around the world, the Ford Foundation and CGAP have been interested in understanding the best way to support the implementation of such programs. The Ford Foundation and some of its allies has allocated resources to provide technical assistance to new implementing agents but the challenge of identifying the advantages and disadvantages of government participation in the Graduation Programs and how to deal with the different challenges that arise in its implementation still remains. Governments often have to face restrictions, different to costs or knowledge, which are equally limiting to the proper implementation of such a complex and multidisciplinary program like these Graduation Programs.

“The question remained, however, how to operate the Graduation Approach at scale. The very factors believed to make it so effective—highly personalized, wrap-around services delivered with compassionate, skilled, and individual attention—also make the “classic” Graduation Approach time- and labor-intensive and costly.”
Sheldon, 2016

Why 5 and not 4? Why 4 and not 6?

The Graduation Program has received rigorous and thorough evidence of its effects on the participants. However, it is still important to recognize that there are important questions to be answered. Particularly, important is the understanding of the role of each component in the results. If each of the 5 basic components had already been implemented in some way for overcoming extreme poverty, why are they so successful now? What is it in the proposed combination that makes the Graduation Program so attractive? Is there a component that is more important than the others? Understanding this relationship makes it easier to transmit its usefulness to governments, especially when they are presented with the fact that something that they had already done, now works more efficiently.

 

“But if so, ..., all our programs were already graduation programs”
Public officer in an implementing institution, 2015

How much do we adapt?

The Ford Foundation and CGAP, in their intention to promote the Graduation scheme within governments, are aware that the program should be adapted to the needs and contexts of each country. However, the question remains, how flexible is the scheme for adaptation? There is not enough information to understand how the adaptations have changed the observed results, just as it is unclear how the combination of the five core components interact. That is, how versatile the program is in assimilating changes to its original structure is still unclear. Changes to the program must, as far as possible, be documented and evaluated. This is a relevant issue especially for governments, that are those which have so far shown that they require more changes to fit the program to their particular context, their implementation strategies and their particular legal and institutional restrictions and conditions.

“Governments are less likely to provide a full [Graduation] package, with 50% of implementations including all components. Governments most often exclude coaching and technical training, the more labor intensive activities in the graduation package.”
CGAP, 2016

Is it only about costs?

Among the recurring concerns of the Graduation Programs, there is the issue of whether the costs of implementing the program are attractive enough to achieve scaling up from governments. Sulaiman et al. (2016) were able to demonstrate that the cost benefit ratio for Graduation Programs is greater than 1, but that this also overcomes other traditional interventions for overcoming extreme poverty when also considering the multiple evidence of the sustainable effects of these programs. Even so, there are concerns, other than costs, for scaling. The complexity of the graduation programs, particularly how their components interact, requires more than financial resources, including but not limited to institutional capacity to interact quickly with other institutions that are able to collaborate in the implementation, achieve an effective synchronization of the different agents in field, and the communication between local, regional and national actors.

 

References

de Montesquiou, A., Sheldon, T., Degiovanni, F., & Hashemi, S. (2014). From extreme poverty to sustainable livelihoods: a technical guide to the graduation approach. CGAP and Ford Foundation.

Sheldon T. (editor) (2016). “Early Lessons from Large-Scale Implementations of the Graduation Approach”. Ford Foundation. Available in https://www.fordfoundation.org/campaigns/early-lessons-from-large-scale-implementations-of-the-graduation-approach/

Centro de Estudios sobre Desarrollo Económico - CEDE (2015). Metodología para la Evaluación de Resultados. Working paper. Plataforma de Evaluación y Aprendizaje de los Programas de Graduación en América Latina. CEDE - Economics Department, Universidad de los Andes.

Banerjee A., E. Duflo, R. Chattopadhyay y J. Shapiro (2011). “Targeting the Hard-Core Poor: An Impact Assessment”. Working paper. Available in https://www.povertyactionlab.org/sites/default/files/publications/110-%20November%202011_0.pdf

Banerjee, A.,E. Duflo, N. Goldberg, D. Karlan, R. Osei, W.Pariente, J. Shapiro, B. Thuysbaert, y C. Udry (2015). “A Multifaceted Program Causes Lasting Progress for the Very Poor: Evidence from Six Countries.” Science 348, no. 6236 (May 14, 2015).

Bandiera O., Burgess R., Das N., Gulesci S., Rasul I. y Sulaiman M. (2013). “Can Basic Entrepreneurship Transform the Economic Lives of the Poor?” IZA Discussion Paper No. 7386. Available at SSRN: https://ssrn.com/abstract=2266813

Bandiera O., Burguess R., Das N., Gulesci S., Rasul I. y Sulaiman M. (2016). “Labor Markets and Poverty in Village Economies”. Working paper. Available in https://www.povertyactionlab.org/sites/default/files/publications/110%20TUP%20Bangladesh%20Mar2016.pdf

BRAC (2016). “BRAC’s Ultra-Poor Graduation Programme An end to extreme poverty in our lifetime”. Available in http://www.ilo.org/wcmsp5/groups/public/---dgreports/---inst/documents/genericdocument/wcms_494535.pdf

Hashemi S. y Montesquiou A con McKee K. (2016). “Graduation Pathways: Increasing Income and Resilience for the Extreme Poor”. Available in https://www.cgap.org/sites/default/files/Brief-Graduation-Pathways-Dec-2016.pdf 

Dharmadasa H., Hashemi S., Samranayake S. y Whitehead L. 2015. “PROPEL Toolkit: An Implementation Guide to the Ultra-Poor Graduation Approach”. BRAC. Available in https://www.microfinancegateway.org/library/propel-toolkit-implementation-guide-ultra-poor-graduation-approach

Sulaiman M., Goldberg N., Karlan D., y de Montesquiou A. “Eliminating Extreme Poverty: Comparing the Cost-effectiveness of Livelihood, Cash Transfer, and Graduation Approaches.” Washington, D.C.: CGAP. License: Creative Commons Attribution CC BY 3.0. Available in https://www.cgap.org/sites/default/files/Forum-Eliminating-Extreme-Poverty-Dec-2016.pdf