Targeting the Ultra Poor

"Half the World is Unbanked" for the first time presented data proving that more than 2.5 billion people (half the world’s adult population) don’t have access to a bank account. Many of these individuals fall into a category we typically call “the poorest of the poor.” In the past five years, FAI and other researchers have set out to find out if this population can be helped—and how. 

Those making less than $1.25/day have been called the “ultra poor.” They are members of society who face a series of constraints and deprivations that distinguish them from the general poor. Research now indicates that most microfinance institutions serve poor and lower-income customers, but not the poorest.  

A 2010 FAI Framing Note by Jonathan Morduch 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. But there is so much more happening in this sector. CGAP’s Graduation Program is based on BRAC’s pioneering work with the ultra poor. “Creating Pathways for the Poorest: Early Lessons on Implementing the Graduation Model” is an evaluation of their program. Morduch also discusses BRAC’s pilot initiative for reaching the ultra poor, Income Generation for Vulnerable Groups Development (IGVGD), and the SKS Ultra Poor Program (UPP), both of which have been replicated all over the world. 

Additionally, you’ll find research and evaluations of BRAC’s program and others inspired by it below. But there may also be other approaches to working with the ultra poor and papers that we’ve missed in this initial round-up. Please feel free to add links to other important reports or sites via comments.