Ultra Poor Graduation Pilots:Ultra Poor Graduation Pilots:Spanning the gap between charity &

microfinance

Nathanael Goldberg, Policy Director

Valladolid, November 14, 2011

Ultra Poor Graduation Model

� Program designed by BRAC to target ultra poor households

� Holistic approach: support � Holistic approach: support household needs for savings, financial education, skills training, healthcare

� Targeting

� Use PWR to identify ultra poor households

Ultra Poor Graduation Model

Source: CGAP (www.cgap.org/graduation)

Substantial numbers of clients do not take up traditional products

COUNTRY FIELD PARTNER PRODUCT TAKE-UP RATE

(%)

Mexico Compartamos Credit 4

Peru Arariwa Credit 7.9

Why not just microfinance?

Peru Arariwa Credit 7.9

South Africa Credit Indemnity Credit 8.7

Ghana Opportunity International Credit 1.8

Philippines Green Bank Insurance 27

Philippines Green Bank Insurance 46

Kenya K-Rep Development Agency Savings 55

Philippines First Isabela Cooperative Bank Savings 2.5

Philippines First Valley Bank Savings 23

Philippines Green Bank Savings 28

Who are the Ultra Poor: Consumption

� Large share of expenses spent on food and fuel:� Pakistan: 54% of total

budget

� India: 72%

� Peru: 70%

In past 12 months, did HH members get enough food?

Some Months 45 %

No18.6 %

Yemen

� Peru: 70%

� Yemen: 69% of stipend

� Majority have at least 2 meals a day� India: 62%

� Pakistan: 75%

� Yemen: 87.5%

� Ethiopia: 83%

� But, seasonality

All Year Some MonthsNot Enough I Don't Know

Yes33%

Some Months56%

No11%

Pakistan

45 %

Who are the Ultra Poor: Income-Generating Activities

ACTIVITY OF THE HEAD OF HOUSEHOLD Percent

Farming Land 2.15tending animals 1.43Selfemployed in business 3.06Fishing 2.99

� Type of activities:

� India:� 12% report agricultural labor as main source of income

1% cultivate land owned by

Pakistan

Fishing 2.99Housework 6.05Agricultural labor 6.84Daily labor fishing 15.49Daily Labor Other 40.04Formal Employment Salaried 3.45Does not work 13.15Other 5.34Total 100

� 1% cultivate land owned by household

� Pakistan:� Avg 1.4 activities

� 13% no activities

� Main activity is daily labor in agriculture or fishing

� Only 2% cultivate land they own

Who are the Ultra Poor: School Enrollment

0.76

0.990.94

0.790.8

1

Percent Enrolled

0.40.33

0

0.2

0.4

0.6

India Pakistan Peru (6-12) Peru (13-16) Honduras (6-12)

Honduras (13-16)

Who are the Ultra Poor: Health

� Shocks

� India: 29% of selected HH experience 1 or more health shock in past year

� Pakistan: Medical expenses 12% of HH budget

� Access to care

� More than 1 hour to nearest health center

� Peru: 24-30%

�Honduras: 28-58%

Replication at 10 Sites

� Replication sponsored by CGAP and Ford Foundation: Haiti, Honduras, Peru, Ghana, Ethiopia, Yemen, Pakistan, India(3)

� Randomized evaluation at 8 sites

Why Evaluate?

� What is the impact of the Graduation model on the ultra poor?

� Impact evaluation measures:

How have the lives of clients changed compared to how they would have changed in the absence of the program

� Note this is different from “How have their lives changed”

Impact: What is it?Primary O

utco

me

Impact

Intervention

Time

Primary O

utco

me

Impact

Why do we need a control group?

� What does it mean when your clients face:

�Macroeconomic changes (+/-)

�Agricultural shocks (+/-)

�Price shocks (-)

My program is good!

My program is bad!

My program is bad!�Price shocks (-)

�New road (+)

�Government subsidies (+)

� The control group gives us the counterfactual

�A randomized control group ensures we compare similar types of people

My program is bad!

My program is good!

My program is good!

Study Design

Baseline

Consumption

� Collect data on eligible households

� Some sites: also collect data from non-ultra poor households

� Many sites have quarterly surveys to monitor Consumption surveys

Follow-up survey

Endline

� Many sites have quarterly surveys to monitor changes

� Survey re-applied to baseline households after 2 years

� 1 year after Endline- track more long-term impacts

Survey Modules

� Household information

� Health indicators

� Education

� Consumption� Consumption

� Income and activities

� Assets

� Credit

� Risk preferences

� Ongoing qualitativeresearch

Cost per client

Country Cost/client (US$)

India $330-$650

Haiti $1,900

� Cost Includes:

� Consumption support

� Asset transfer

� Staff costsHaiti $1,900

� Staff costs

� Head office overhead

� Proportion of cost spent on each program component varies by country

� Which parts of the program create the most impact?

� Need evaluations to separate contributions of individual components

Ghana Ultra Poor Pilot Design

241 Communities (3,981 households)

Core Module:

78 communities

Savings Only:

77 communities

Asset Only:

10 comm.

Control:

76 comm.

Regular Susu UP only

control HH

Regular Susu

Matched Savings

control HH

asset only HH

Purecontrol HH

Susu Savings & UP HH

UP only HH

control HHSusu Savings HH

Savings HH

HH

� Randomize communities, then households

� Measure spillovers of program by comparing ‘pure’ control households with control households in treatment communities

� Next year: randomize employment program

Initial Results: Bandhan

� Increase in food consumption

� mean difference of Rs. 64 per person per month

� represents 15% of control � represents 15% of control group mean

� greater than 25% for excluding those who refused participation

� little indication of increase in non-food consumption

Initial Results: Bandhan

� Increased Food Security

� less likely to skip or reduce meals, especially among adults

� Health� Health

� Increase in health knowledge (hand washing, etc.)

� Decreased emotional stress and increased life satisfaction

� Little impact on physical health

Initial Results: SKS

� No significant increases in consumption� Shift in income: agriculture �

livestock

� 8% less likely to receive � 8% less likely to receive “below the poverty line” rations

� No impact on children in school

� Decreased amounts of outstanding loans by 84% of initial average amount � Less likely to borrow from

money lender

Initial Results: SKS

� More likely to be saving, impact on amount is uncertain

� Health� Health� Reported being sick less: lost 2 fewer work days (in month prior to interview) to sickness (which is 56% of baseline number of days lost)

� 12% less likely to have gone to doctor/hospital in past year

Take-away points

� Integrated approach: Ultra Poor Graduation Model takes holistic approach to addressing needs of households in extreme poverty

� Evaluation is essential: Does the graduation program help ultra poor to generate income, build up assets, increase consumption? RCTs answer these questions.increase consumption? RCTs answer these questions.

� Early impacts mixed but promising: Initial results tentatively suggest model is working, but long-term results will be key

� Improving the model: Which program components are most useful?� Ghana evaluation will explore this question by randomizing

program components� Suggest most cost-effective way to scale program

Thank You!

www.poverty-action.org

ngoldberg@poverty-action.org