BRAC`s Focus on Extreme Poverty

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BRAC’s Focus on Extreme Poverty
BRAC realized early on that the poor were not a homogenous group. Within the ranks of the
poor were groups with lower asset levels, fewer employment opportunities, greater
consumption deficits, and greater vulnerability to periodic economic and health shocks and
natural disasters. Many were in female-headed households. BRAC also realized that their
successful conventional microfinance program was generally failing to reach this group in
“extreme poverty:” about a quarter of the population in Bangladesh in the 1980s. The
Government of Bangladesh was targeting many of them with time-bound safety net programs
but failing to create sustainable asset bases and livelihoods for them to remain food secure after
the end of the program period. This provided the entry point for BRAC. It teamed up with the
World Food Programme and the Government to target households (mostly female-headed) in
the government food grain transfer program (the Vulnerable Groups Development Program)
and provide them with a set of carefully sequenced assistance over a 24-month period to enable
them to graduate into food security. The IGVGD (Income Generation for the Vulnerable Groups
Development Program) program was thus started in 1987 after a two-year piloting phase.
There were five essential elements to the program:
 Targeting: conducted by the government to select destitute (mostly female headed)
households with a further targeting by BRAC to exclude those unable to carry out microenterprise activity
 Food grain safety net: provided by the government with World Food Programme
assistance—monthly food grain rations for a 24-month period
 Skills training: provided by BRAC for households to carry out micro-enterprise activities
 Financial services: in the form of regular savings and eventual access to small amounts
of credit.
 Attendance at BRAC group meetings: to build confidence and social capital
At the end of the program period, members were encouraged to be part of the regular BRAC
microfinance program. BRAC IGVGD has covered 1.8 million households. Surveys on changes in
the lives of program participants were generally positive. They indicated that “IGVGD client
incomes rose significantly, material assets (ownership of homestead plots, land, beds and
blankets) increased and the percentage of households engaged in begging dropped
dramatically.” And almost two-thirds had joined the microfinance program. But BRAC research
also showed that it was difficult for many to maintain income earnings after the end of the food
subsidy and that for many, credit wasn’t a viable option to graduate into. In fact a quarter of the
women said that they could never recover from the loss of the food grain (assistance). They sold
off their chickens, used up the loan fund for consumption and worried about making
repayments (on the loans they had taken). They said they were as destitute as they had been
before and were praying to get back into the food grain program.
BRAC is a constant learning laboratory. They were committed to programs for those in extreme
poverty but realized the limits to the IGVGD program. Field level research provided them with
the lessons to start a newer, far improved program—Challenging the Frontiers of Poverty
Reduction—Targeting the Ultra Poor (CFPR-TUP). Critical design changes that BRAC made
included:
 building assets through start-up grants
 diversifying livelihoods to protect against shocks
 monitoring more intensively and coaching through weekly home visits
 assistance through Village Assistance Committees of village elders
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continuing but with a stronger focus on health, nutrition, children’s schooling and
savings
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