Graduation Program Components
The theory of change, foundational to BRAC’s original design and adaptations by the Ford Foundation, CGAP, and Fundación Capital, posits that the right combination of interventions delivered in the correct sequence can empower ultra-poor households to build sustainable livelihoods and “graduate” from poverty. Graduation programs typically include: 1) Consumption Support; 2) Access to Financial Services; 3) Training; 4) Seed Capital; 5) Mentorship.
Market Analysis
Conducting a market analysis is a fundamental step before defining or transferring assets. Highlighted by Sheldon (2016), this component is crucial for scaled or scaling programs, though its inclusion varies across implementations.
Targeting
Targeting in graduation programs is dynamic. Initially designed by BRAC for the ultra-poor—highly marginalized populations with low participation in social programs—the scope has broadened to include other vulnerable groups such as indigenous populations (31%), conflict victims (9%), youth (18%), persons with disabilities (22%), and older adults (9%). Recent implementations also extend geographically, reaching both rural and urban areas.
Extreme poverty
Sustainable livelihoods
This component provides resources for productive activities, identified through participant training and mentoring. Found in 93% of implementations, asset transfers can be monetary (cash/electronic) or in-kind (CGAP, 2016). Some programs offer employment opportunities as an alternative.
This component provides resources for productive activities, identified through participant training and mentoring. Found in 93% of implementations, asset transfers can be monetary (cash/electronic) or in-kind (CGAP, 2016). Some programs offer employment opportunities as an alternative.
Technical training supports productive activities, often promoting transversal skills such as budgeting and market analysis. This component is more prevalent in NGO- and donor-led programs (97% and 86%, respectively) but less common in government-led implementations (72%).
Savings promotion fosters access to financial services and improves savings levels, serving as a central tool for risk management (Hashemi et al., 2016). Implemented in 90% of programs, strategies include savings groups (66%) and complementary financial education or connections to formal banking.
This component alleviates food constraints through cash or food assistance, reducing the impact of food insecurity on productive household decisions (Hashemi et al., 2016). Present in 78% of graduation programs, most use electronic cash transfers (55%) or direct payments (19%), often linked to conditional or unconditional cash transfers in eligible countries.
Start
Month 3
Month 6
Duration
An Innovative Strategy for the Reduction of Extreme Poverty
Since 2002, the BRAC Development Institute in Bangladesh developed a poverty graduation program with an innovative and holistic approach known as Challenging the Frontiers of Poverty Reduction / Targeting the Ultra Poor – TUP (De Montesquiou et al., 2014). The program not only sustained itself over time but also generated sufficient confidence in its results. Among its supporters were the Ford Foundation and the CGAP (Consultative Group to Assist the Poor), which undertook an ambitious effort between 2006 and 2014 to demonstrate that BRAC’s experience could be replicated (Sheldon, 2016).
“As of September 2016, 58 Graduation projects were operational, a 30% increase since December 2015. A third of these ongoing projects are implemented by governments.”
Sheldon, 2016
Ongoing Exploration
How Best to Support Government Scaling?
Recognizing governments as fundamental and strategic partners for scaling Graduation Programs globally, the Ford Foundation and CGAP have focused on understanding the best ways to support their implementation. While the Ford Foundation and its partners have allocated resources to provide technical assistance to new implementers, challenges remain in addressing the advantages and disadvantages of government involvement in Graduation Programs.
Governments often face constraints beyond costs or expertise that limit the effective implementation of such complex and multidisciplinary programs. These constraints include institutional restrictions and the need for capabilities to manage labor-intensive and cost-sensitive components of the classic Graduation approach.
“However, the question remains: how to operate the Graduation Approach at scale? The same factors believed to make it so effective—highly customizable service packages delivered with compassionate, qualified, and individualized attention—also make the classic Graduation approach labor-intensive and costly.”
Sheldon, 2016
Why Five Components and Not Four or Six?
The Graduation Program has robust and extensive evidence regarding its impact on participants. However, key questions remain, particularly about the role of each component in achieving results. Each of the five basic components has been implemented in some form to address extreme poverty. So why does the proposed combination achieve such remarkable success? Is one component more critical than others?
Understanding this relationship makes it easier to communicate its value to governments, particularly those who might view the program skeptically, thinking it resembles past initiatives.
“But if that’s the case… all our programs were already Graduation programs.”
Public official from an implementing entity in Latin America, 2015
How Much Should We Adapt?
Fundación Ford y el CGAP, en su intención de promover el esquema Graduación ente los gobiernos, son conscientes que el programa debe ser adaptado a las necesidades y contextos de cada país. Aun así, queda la duda, ¿qué tan flexible es el esquema para la adaptación? No existe información suficiente parar entender como las adaptaciones hechas hasta a la fecha han modificado los resultados vistos, de la misma forma que no es claro cómo la combinación de los cinco componentes del núcleo interactúan. Esto es, no es claro que tan versátil es el programa para asimilar cambios en su estructura original. Cambios al programa deben en lo posible buscar ser documentados y evaluados, tema relevante en especial para los gobiernos que son los que hasta ahora han mostrado requerir más cambios que se ajusten al contexto particular de su país y al de sus estrategias de implementación, así como a sus restricciones y condiciones particulares tanto jurídicas como institucionales.
«Es menos probable que los gobiernos proporcionen un paquete [Graduación] completo, con el 50% de las implementaciones incluyendo todos los componentes. Los gobiernos suelen excluir las mentorías y la capacitación técnica, las actividades más intensivas en mano de obra en el paquete de graduación.»
CGAP, 2016
Is It Just About Costs?
A recurring concern for Graduation Programs is whether implementation costs are attractive enough to encourage scaling by governments. Research by Sulaiman et al. (2016) demonstrates that the benefit-cost ratio exceeds 1 for Graduation Programs, outperforming other traditional poverty reduction interventions when considering the strong evidence of their sustainable long-term effects.
However, challenges beyond cost remain. The complexity of Graduation Programs, especially in terms of how their components interact, demands more than financial resources. Success also requires institutional capacity to coordinate across multiple organizations, synchronize efforts among field agents, and establish effective communication between local, regional, and national stakeholders.
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. Disponible en 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. Documento Interno de Trabajo. Plataforma de Evaluación y Aprendizaje de los Programas de Graduación en América Latina. CEDE-Facultad de Economía, Universidad de los Andes.
- Banerjee A., E. Duflo, R. Chattopadhyay y J. Shapiro (2011). “Targeting the Hard-Core Poor: An Impact Assessment”. Documento de trabajo. Disponible en 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”. Documento de trabajo. Disponible en 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”. Disponible en 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”. Disponible en 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. Disponible en 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. Disponible en https://www.cgap.org/sites/default/files/Forum-Eliminating-Extreme-Poverty-Dec-2016.pdf
