"Half the World is Unbanked" for the first time presented data proving that more than 2.5 billion people (half the world’s adult population) don’t have access to a bank account. Many of these individuals fall into a category we typically call “the poorest of the poor.” In the past five years, FAI and other researchers have set out to find out if this population can be helped—and how.
Those making less than $1.25/day have been called the “ultra poor.” They are members of society who face a series of constraints and deprivations that distinguish them from the general poor. Research now indicates that most microfinance institutions serve poor and lower-income customers, but not the poorest.
A 2010 FAI Framing Note by Jonathan Morduch discusses why the most disadvantaged citizens are missed by a system intended to serve the poor, reviews pilot programs that target the ultra poor in Bangladesh, India, and Haiti, and offers a preliminary assessment of the impacts these programs are having. But there is so much more happening in this sector. CGAP’s Graduation Program is based on BRAC’s pioneering work with the ultra poor. “Creating Pathways for the Poorest: Early Lessons on Implementing the Graduation Model” is an evaluation of their program. Morduch also discusses BRAC’s pilot initiative for reaching the ultra poor, Income Generation for Vulnerable Groups Development (IGVGD), and the SKS Ultra Poor Program (UPP), both of which have been replicated all over the world.
Additionally, you’ll find research and evaluations of BRAC’s program and others inspired by it below. But there may also be other approaches to working with the ultra poor and papers that we’ve missed in this initial round-up. Please feel free to add links to other important reports or sites via comments.
- Two important papers studying the impacts of programs targeting the ultra poor in India, based on randomized controlled trials, were presented at the Microfinance Impact and Innovation Conference 2010. The programs were inspired by BRAC’s work and are part of CGAP’s Graduation Program. J-PAL’s Abhijit Banerjee, Esther Duflo, Raghabendra Chattopadhyay, andJeremy Shapiro reported on a program implemented in West Bengal, and Jonathan Bauchet, Jonathan Morduch, and Shamika Ravi wrote about a program in Andhra Pradesh.
- Innovations for Poverty Action have a section on their site devoted to their work in the area of targeting the ultra-poor. This site presents more info on the Ultra Poor Graduation program and published papers to date.
- BRAC has also conducted its own evaluations of its programs, although they don’t use randomized controlled trials. Their reports can be found on their site.
- FAI researcher Jonathan Bauchet blogs about new impact studies on targeting the ultra-poor and in a follow-up blog, discusses some short-term impacts.