Working with the ultra-poor: learning from BRAC experiences

This paper describes BRAC experiences of working with the ultra-poor over the last two decades. The ultra-poor is the poorest section among the population with a few or no asset base, highly vulnerable to any shocks and mainly depending on wage labour. The main causes of their poverty, especially in the rural areas, are poverty inheritance, loss of income earner and ill health. Although microfinance is targeted to the poor, the ultra-poor, lacking livelihood resources, are reluctant to borrow with the fear of being overburdened, and indeed have a fear of the cash economy. They need a critical push to uplift their initial endowment base, in as risk-free a manner as possible, to a certain level which is necessary for getting greater access to other resources and their productive utilization. The BRAC Income Generation for Vulnerable Group Development (IGVGD) scheme was devised in 1986, and arose from the coming together of three circumstances: (i) an awareness that 'leaving everything to the community' would not deal with the problem of marginalisation of the ultra-poor within the community; (ii) an offer in that year of food aid from the UN World Food Programme, which offered the potential of over coming the ultra-poor's 'fear of cash' and (iii) a decision by BRAC to use a combination of food aid, savings and training in activities with low capital requirements as a means of enabling the marginalized to climb the ladder out of ultra-poverty. IGVGD is an integrated package of food distribution, savings, micro-credit provision, social awareness-building and skill development training and essential health care interventions. Different study findings conducted within the country and outside indicate that IGVGD is very successful and also cost-effective in reaching the ultra-poor; and that females coming from male-headed households can participate more fully in the IGVGD programme activities; it is the men who use NGO credit, and husbands' incomes are the primary source of installment payments. However, there has been a tendency for some women to take advantage only of the consumption-related benefits of the IGVGD (principally food aid) and not to graduate up all the steps of the ladder into self-sustained businesses. In response to this, a new programme, Challenging the frontiers of poverty (CFPR) was devised in 2002, and is still in its pilot stages. This has more stringent targeting requirements than IGVGD and provides for more intensive mentoring of the ultra-poor, and provides more intensive subsidy in the area of maternal and child health, but adopts the same approach of supervised 'graduation' from minimal-risk to higher-risk activities. IGVGD as a model now been quite widely imitated and adapted, at least within Bangladesh, and at the latest count some 72 organizations had some provision for the ultra-poor. In a final section we review the implications of evaluation of these diverse activities for IA methodology. One interesting finding is that whereas, in the lower-middle reaches of financial markets at which microfinance typically operates, quantitative approaches yield more optimistic findings (for women borrowers' welfare) than qualitative, for the ultra-poor it is the other way around; many IGVGD borrowers, at least, experienced few changes in income, but important improvements in autonomy and social status. Copyright © 2004 John Wiley & Sons, Ltd.