Multiplying The Graduation Experience: Vision and Practical Ideas
This post was originally published on CGAP Microfinance Blog.
How do you move millions of people out of extreme poverty? Today, the Graduation model, inspired by BRAC’s program in Bangladesh, has achieved success by showing how to move ultra poor households in Haiti, India, Pakistan, and Honduras out of extreme poverty and by giving them hope that they can improve their current standard of living. What began as a modest pilot program now has evidence of positive impact and with care can be scaled to reach that difficult-to-reach population of ultra poor people around the world where solutions seem intractable.
During a panel of the recent “Reaching the Poorest 2012” conference, Lynn Brown from the World Food Programme (‘WFP’), Rahatullah Baig from the Pakistan Poverty Alleviation Fund (‘PPAF’), Yves Moury from Fundación Capital, and Irina Ignatieva from Concern Worldwide (‘Concern’), all provided interesting perspectives and practical ideas on what can be done to take the graduation model to more people who can implement it. Here some of the important points that emerged during the discussion:
Scaling-up Requires New Thinking: Scaling-up implies thinking large-scale and requires thinking on a systemic level that is quite a different approach to whatever works during the pilot phase. As Yves Moury pointed out, when partnering with governments you need to start working within existing frameworks of public policy, however imperfect they may be: “So what we really need to do is to find ways of including our new thinking into existing policies.”
Looking at the graduation model from a value-chain and broader market perspective was also cited as important when moving to scale. As the scale of economic activities expands with the program, they will also require support (i.e. microfinance or extra capital) to expand their opportunities and to invest in different technologies that can bring their products and services to broader markets.
The Power of Partnerships: It was striking that all panellists said that linking with partners is an important part of expanding the Graduation model. Partnerships with both the private and public sectors will achieve greater outreach and impact in a potentially cost-effective way when multiplying the graduation experience and scaling it up.
Reducing Costs: The question on how to reduce the operating costs of the Graduation model also emerged as an important point to consider when scaling-up. Making better and more extensive use of technology such as mobile phones or using digital data gathering devices for monitoring were cited as ways in which programs can be run more efficiently. Another example came from Concern, who will explore outsourcing cash transfers (part of the consumption support component) to a private company in Burundi. And Yves Moury suggested that we look at the costs in a completely different way- as an investment, in the same way we think about investments in a new hospital or road.
We also learned about some interesting current developments taking place right now that show in what new directions the graduation model can be taken when scaling up:
- The WFP has been involved in working with BRAC in Bangladesh since its early days. The WFP program reaches 30,000 households in Bangladesh and intends to do more. They are now working with IFAD, another UN organization, on a joint concept note to partner their efforts in this area- a great idea for collaboration and one that took shape at the conference.
- PPAF has been working with the Graduation model for two years. PPAF will work with existing infrastructure and local union councils in Pakistan to identify ultra poor populations and to get information about the different kind of microenterprises for which there is demand.
- While Fundación Capital does not work with the Graduation model directly, it does work on solutions to address extreme poverty in Latin America such as savings and conditional cash transfers. Working with existing government mechanisms and policies Fundación Capital has successfully linked poor people with savings mobilization schemes in Peru and this work has now expanded to 12 governments. In a few years Yves believes that millions of beneficiaries will be reached bringing their savings into the formal banking system. This can complement work done in Graduation programs.
- Irina described Concern’s work with Fonkoze in Haiti; they gained experience working with the Graduation model there and are now looking to move to countries in Sub-Saharan Africa, building on their experience in Haiti.
All of us working with the Graduation model must share experiences and find appropriate ways to involve governments, donors and the private sector to bring the model to a larger population of people living in extreme poverty. In countries like Ethiopia there will be opportunities to leverage existing safety net programs currently working with 8-10 million poor people. I visited clients of the Graduation model in Tigray and they want to ‘graduate’ so that others can take the same steps to move out of extreme poverty. For the model to move beyond 500 households many stakeholders will have to combine their efforts to reach millions.