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Microfinance: Interest to Action Part 2 of 5

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Microfinance: Interest to Action Part 2 of 5

  1. 1. www.brac.net Challenging the Frontiers of Poverty Reduction Targeting the ultra poor A Special Investment program to combat ultra poverty Rabeya Yasmin Director , BRAC
  2. 2. www.brac.net Global Poverty • 1.5 billion of world population in ultra poverty • Poverty rates across the globe are falling, but there are populations not affected by these trends
  3. 3. www.brac.net Bangladesh Poverty Record Head Count poverty declined from 70% in 1973-74 to 32% in 2010 Still we have – 17% population in lower poverty line
  4. 4. www.brac.net Still we have ultra poor – 94 % landless 32% of household cannot afford two meals a day 1.3% can consume egg 3 times/week 17% can consume small fish 3 times a week 58% HHs do not use sanitary latrine 7% HHs head has primary education (Source: A joint study by the London School of Economics and Research and Evaluation Division of BRAC , 2007)
  5. 5. www.brac.net About BRAC • Founded in Bangladesh in 1972, BRAC is considered “by most measures the largest, fastest-growing non-governmental organization in the world.” (Source: Economist, 2010) • BRAC has been at the forefront of poverty alleviation in 10 counties reaching 100 million population • BRAC creates opportunities for the poor • BRAC believes and acts on holistic approach
  6. 6. www.brac.net BRAC’s quest for a meaningful investment in to the lives of the poorest Insights from BRAC’s deep and extensive presence at the grassroot Conventional Microcredit was not the best solution for the ultra poor The challenge is to design a sustainable market based livelihood program for the poorest
  7. 7. www.brac.net New Innovation - In 2002 BRAC launched a special program called : “Challenging the Frontiers of Poverty Reduction –Targeting the Ultra Poor” - Objective Achieve sustainable economic and social changes in the lives ultra poor by creating assets, skills, hope and aspiration at household level Assist the ultra poor in getting access to the mainstream development programs
  8. 8. www.brac.net Targeting the Ultra Poor Program Strategy program works in two approaches : 1. Full Grant based Special Investment program for the poorest among the lower poverty line 2. Credit plus grant investment for the ultra poor who are marginally less deprived
  9. 9. www.brac.net Targeting Indentify program location Locations with very high and high poverty incidence selected using Govt. poverty map Identify poorest households •Participatory Wealth ranking exercise •Door to door survey y front line supervisors •Verification by mid level managers
  10. 10. www.brac.net Program Supports Full grant Special Investment Program Credit plus grant approach 1. Asset transfer; weekly stipend. Build economic asset base, ensure regular cash flow, improve livelihoods. 1. Soft Loan replaces Asset Transfer for this category. Loan terms : flexible loan size, flexible savings, six-montly loan 2. All other supports remain the same. Enterprise development, life skill training, tailored made health care, Community mobilization works. 2. Enterprise development and life skill training To ensure good return from assets transferred, awareness of rights and justice 3.Tailor made health intervention. Improve health seeking behavior, reduce income erosion in health 4. Engaging with the community. To create supportive/ enabling environment at village level,ensure long term sustainability of improved livelihood of the ultra poor members.
  11. 11. www.brac.net Participatory Wealth Ranking Exercise Targeting Community participates in a spatial mapping and wealth ranking exercise to identify community members in the most need Community participates in a spatial mapping and wealth ranking exercise to identify community members in the most need
  12. 12. www.brac.net Goat rearer Cow rearer Duck rearer Vegetable grower ASSET TRANSFER We offer 12 options of enterprise
  13. 13. www.brac.net STIPEND To allow the client breathing room, and time to start earning income from her assets, the client receives a cash transfer or stipend, and in some cases a food to supplement their diet.
  14. 14. www.brac.net Training / handholding Client receives weekly home visits and training on how to use their asset, on health and hygiene matters, basic skills and literacy, and general support and counseling Program participants receiving class room training at BRAC office
  15. 15. www.brac.net Tailored Health Intervention Panel doctor give prescription to Program participant BRAC Health staff visiting a TUP member Tube well installed for safe drinking water at a TUP household
  16. 16. www.brac.net Mobilizing community Support Free Coaching for poorest children Village committee Meeting Donating Warm Cloths
  17. 17. www.brac.net Graduation out of ultra poverty Coverage 2002- 2013 , 1.4 million poorest families covered by BRAC in Bangladesh Concept of Graduation Graduating into a better life from the most deprived condition Participation in mainstream market based economic activities
  18. 18. www.brac.net Impact  Longitudinal Impact Study over 8 year  Randomized Control Trial applied Results so far highly impressive : 95 % graduated from extreme poverty trap by obtaining : Significant Increase in Income Significant shift in Occupational choice Food Security Social Inclusion
  19. 19. www.brac.net Insights ? •Poorest should not be seen as permanent charity cases •Comprehensive Targeted Programs needed •Exit plan
  20. 20. www.brac.net
  21. 21. www.brac.net Join us in the movement to end ultra-poverty. Contact us to learn more BRAC Centre 75 Mohakhali Dhaka 1212 Bangladesh rabeya.y@brac.net BRAC USA 110 William Street, 29th Floor New York, NY 10038 USA susan@bracusa.org
  22. 22. www.brac.net Thank You !

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