The term ultra-poor was coined in 1986 by Michael Lipton of the University of Sussex. It is defined as “a group of people who eat below 80% of their energy requirements despite spending at least 80% of income on food”. The majority tends to be landless rural women.
It is difficult to say how many people in the world today fit this definition, but it’s likely in the hundreds of millions. About 162 million people live in “ultra-poverty,” defined as living on less than 50 cents a day, with an additional 323 million living in “medial poverty”, defined as living on between 50 and 75 cents a day, according to a 2007 report from the International Food Policy Research Institute, based on 2004 data.
These populations are often the hardest to reach. Most market-based interventions, including microfinance, don’t help them. If you give an ultra-poor woman a loan, she won’t be able to repay it, since all her income goes into sustenance.
So what can you do? After years of trial and error, Brac – a Bangladesh-based NGO – came up with a methodology tailored for the ultra-poor and applied it over 24 months. The results were eye-popping. A study released in 2010 (and later published in Journal of Development Effectiveness) reported that more than 95% of participants left the rigorously defined category of ultra-poverty over the two years – and more importantly, they had stayed out of it four years later. Follow-ups recorded similar results. A randomised control trial released in 2013 showed dramatic and sustained shifts (shown in chart form in this briefing note on ultra-poverty) in value of livestock, self-employment, earnings and self-reported happiness, long after the period of support had ended.
Outside Bangladesh, CGap and the Ford Foundation have coordinated studies in eight countries on graduation programs explicitly modelled on Brac’s. After 18 to 36 months, 75% to 98% of participants meet “graduation” criteria. In other words, graduation seems to work – and not just in Bangladesh.
We’re now ready to open-source that approach, both to help others achieve similar results and refine our own methodology. The first step is targeting or finding the people who needed help the most; this is done through what we call “participatory wealth ranking” – gathering about 40 to 50 people in the village or community to determine who’s the poorest. Programme staff follow up with in-person visits to potential participants, using a set of standard criteria – number of meals a day, whether their roof is thatched or tin, and so on – to determine who qualifies. Senior managers then verify the selection. It’s a mix of bottom-up participatory involvement and top-down supervision, intended to ensure that no ultra-poor are left out, and funds are not wasted on those who could benefit from a less costly intervention.
Next come asset grants – often a goat, chickens or a cow, a cash and food stipend to give the woman breathing room while she learns a new trade, access to a savings account, training in basic literacy and numeracy where she often learns to write her name for the first time, and basic preventative and curative healthcare. Others in the community, including village elites, are brought into the process. Coaching or “handholding”, in the form of weekly visits from programme staff to overcome challenges, is essential. This goes on for 24 months.
It may sound like a brute force approach, but it’s one that’s applied smartly and efficiently. For a short period of time, we exert maximum pressure on the major determinants of poverty; little to no health care, lack of livelihood skills and capital, illiteracy, low self-esteem, and social exclusion.
It can, however, be expensive; the per-person cost is a little under $500 per person for two years in Bangladesh which can add up if you’re reaching 1.5 million people, as Brac has with this programme – often called a “graduation” programme, since the intention is to graduate the ultra-poor to a less extreme form of poverty and put them on a path out of poverty altogether.
Our ancestors lived in dire poverty by today’s development standards, living with poor sanitation and dying of cholera, tuberculosis and polio. As Paul Collier wrote in The Bottom Billion: “Poverty is not intrinsically a trap. Otherwise we would all still be poor.” If we’ve put an end to worse forms of absolute poverty in richer countries, we can everywhere, though we might have to force open a few trap doors to do so.
Written by Scott MacMillan