The Graduation Approach and Poverty Alleviation in Bangladesh

Graduation ApproachBangladesh, a country with more than 170 million people, has long struggled with widespread poverty, limited economic opportunities and vulnerability to natural disasters. However, since the 2000s, Bangladesh has made huge strides in improving welfare and halving poverty rates. For example, the estimated poverty went from 13.47 in 2016 to 10.44 in 2022 (using the international poverty line of $2.15).

The innovative strategies of BRAC’s “Graduation Approach” have been instrumental in uplifting the impoverished and fostering sustainable livelihoods. Built upon the hopes of addressing multidimensional poverty, it has effectively contributed to the sustained alleviation of poverty in Bangladesh.

The Graduation Approach in Bangladesh

The Graduation Approach is a multifaceted intervention designed to empower the ultra-poor by combining asset transfer, skills training, access to financial services and coaching. In Bangladesh, this approach has been implemented through various programs, with one of the most notable initiatives being the Targeting Ultra Poor (TUP) program launched by BRAC. The TUP program has demonstrated the transformative power of the Graduation Approach.

Central to the approach is the concept of asset transfer, which involves providing participants with productive assets, such as livestock, tools or seeds, to kickstart income-generating activities. As agriculture in Bangladesh plays a central role in the economy, asset transfer has enabled participants to establish small businesses. Subsequently, rural areas have reduced poverty between 2010 and 2016, accounting for 90% of the poverty alleviation.

In addition to asset transfer, the Graduation Approach places a strong emphasis on skills development and training. In Bangladesh, this has materialized in the form of tailored training programs that equip participants with the knowledge and expertise needed to effectively manage their businesses or agricultural activities. This training has enabled people living in poverty to make informed decisions and optimize their resources. Such training initiatives have contributed to the long-term success of the Graduation Approach in alleviating poverty. It has been proven that combining large-scale asset transfers and skills training equips the ultra-poor with access to self-employment and increases earnings by 37%.

Access to financial services is another critical facet of this approach. In Bangladesh, the provision of microcredit and savings facilities has empowered participants to invest in their enterprises, build assets and weather financial shocks. Coaching and mentorship are also integral components of the Graduation Approach. For instance, 11,864 workers have received financial services and financial literary education across 30 factories in Savar, Tongi and Gazipur. This presence of coaches and mentors has not only offered practical assistance but has also empowered participants with the confidence to be self-sufficient.

The Positive Impact 

The poverty progress in Bangladesh has been striking, with the Ultra-Poor Graduation program reaching more than nine million people in two million households and helping 95% of participants escape extreme poverty. This level of success has allowed the BRAC Ultra-Poor initiative to be implemented in 13 other countries, including Ethiopia, Honduras and Pakistan. Such implementation has occurred through technical assistance to governments and NGO partners. By showcasing how national approaches by governments can drive progress in poverty reduction, the graduation approach has demonstrated a ripple effect.

One of the key strengths of the Graduation Approach is its potential for scalability and sustainability. The approach fosters self-reliance by equipping participants with the tools and knowledge to manage their livelihoods. In influencing policy change to support the uptake of the Graduation Approach, it is believed that up to 21 million people can escape poverty by 2026. The program’s encouraging success in Bangladesh paves the way for similar development worldwide.

– Chloe Zyko
Photo: Flickr