Targeting the Ultra Poor

Can the poorest be reached with finance? "Ultra poor" members of society face a series of constraints and deprivations that distinguish them from the general poor. Limited social networks, chronic malnutrition, and reliance on patronage systems characterize a socioeconomic class that is hard to "bank." Research now indicates that most microfinance institutions serve poor and lower-income customers, but not the poorest. In a new FAI Framing Note by Jonathan Morduch "Targeting the Ultra Poor" discusses why the most disadvantaged citizens are missed by a system intended to serve the poor, reviews pilot programs that target the ultra poor in Bangladesh, India, and Haiti, and offers a preliminary assessment of the impacts these programs are having.