Microcredit and its reach

Reaching the poorest: lessons from the Graduation Model

April 24, 2012

Syed Hashemi, Founder and Director, BRAC Development Institute and Senior Advisor, CGAP
Aude de Montesquiou, Microfinance Analyst, CGAP
Anasuya Sengupta, Senior Research Associate, BRAC Development Institute

Microfinance is about extending financial access to poor and excluded people. However, apart from a few notable exceptions, microfinance has not typically reached extremely poor people—those at the lowest level of the economic ladder. The majority of the world’s estimated 150 million microcredit clients are thought to live just below and, more often, just above the poverty line. In 2006, the Consultative Group to Assist the Poor (CGAP) and the Ford Foundation launched the Graduation Program, a global effort to understand how safety nets, livelihoods and microfinance can be sequenced to create pathways for the poorest out of extreme poverty, adapting a methodology developed by BRAC in Bangladesh. The CGAP-Ford Foundation Graduation Program is helping to implement ten Graduation Pilots in eight countries, in partnership with local organizations. Impact assessments and/or qualitative research are being implemented in all sites. BRAC Development Institute’s recent qualitative research in India, Pakistan and Ethiopia can help us get a better understanding of chronic poverty and constraints facing the poorest in different contexts.  Read more

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