After years of successful poverty reduction, the COVID-19 pandemic may cause 150 million people to return to severe poverty. Poverty is “a cyclical pattern where the multidimensional causes of extreme poverty prevent people from acquiring the resources to escape it.” However, the graduation approach to poverty reduction has proved successful in overcoming the multifaceted obstacles of extreme poverty.
What Is the Graduation Approach?
In 2002, the Bangladesh Rural Advancement Committee (BRAC) established the graduation approach to poverty reduction. The graduation approach is a way of attacking extreme poverty from multiple angles. A “set of interventions designed to address the” complexity of the issue are implemented to provide the “’big push’ people need to escape the poverty trap long term.” Since 2018, the graduation approach has reached almost 14 million people in 50 different countries. And, it is being used by more than 100 organizations.
BRAC pioneered the approach in Bangladesh in 2002. There, it had a 95% graduation from poverty success rate. Its success is attributed “to a combination of consumption support and asset/cash transfers, followed by up to two years of training” and mentoring. The program can last anywhere from 18-36 months per household with an average cost of only $1,400.
The Four Pillars of the Graduation Approach
Over time, the graduation approach to poverty reduction has been broken down into four main pillars.
- Social Protection – Social protection means meeting the basic needs of participants before pushing ahead with the program. This includes providing cash stipends, consumption support and access to health care.
- Income Generation – At this point in the program, households are provided with productive asset transfers that help them maintain sustainable incomes. This could be in the form of equipment, seeds or livestock. The participants are also given vocational and farm-based training in order to improve their technical skills.
- Financial Support – This pillar focuses on providing training to participants on how to manage their incoming and outgoing finances. Participants are taught that savings help circumvent difficult times. They are introduced to community savings groups and mentoring that help generate income. When a household completes the graduation program the participants are connected with more conventional financial institutions to provide them with long-term support and growth.
- Social Empowerment – Throughout the graduation approach, participants learn many new life skills through mentoring, peers and coaching. These new skills provide participants with confidence and opportunities to become more integrated with their communities.
Graduation Success Rate in the Philippines
From June 2018 to September 2020, 1,800 households in the Philippines participated in a pilot of the graduation approach to poverty. Findings showed that 71% of households met all the “criteria under the four pillars of graduation” and saw improvement in their life skills and financial management. The participants greatly improved their hygiene, nutrition and health practices as they retained at least 80% of their life skills training. At the start of the program, 74% of participants had access to a sanitary toilet. By the end of the program, everyone had access to one.
Despite the program taking place during the COVID-19 pandemic, the participants were still able to initiate livelihoods and earn income. As of September 2020, around 60% of individual livelihoods remained fully operational and 73% of group livelihoods remained intact. The graduation approach to poverty reduction also taught participants how to react to changing trends in the market due to the pandemic. In turn, participants were able to stay above the food poverty threshold.
Overall, the graduation approach to poverty reduction has proved extremely successful. It provides the “big push” that individuals living below the poverty line need in order to escape the cyclical trap. With new knowledge, resources and savings, individuals that have been through the graduation program are set up for long-term success.
– Trystin Baker