1 Targeting the Ultra Poor: An Impact Assessment

Study Background: Graduation Model Graduation model based on “Challenging the Frontiers of Poverty Reduction-Targeting the Ultra Poor” (CFPR-TUP) program pioneered by BRAC Model being replicated and evaluated (orchestrated by CGAP and the Ford Foundation in partnership with local organizations) in 9 locations –Ethiopia, Haiti, Honduras, Pakistan, Peru, Yemen and India in three places (with Bandhan, SKS, and Trickle Up)

Overview Program Objective (Bandhan) To provide free income generating assets, training, and other assistance to help ultra poor households secure a regular source of income, and to graduate them to potential microfinance clients. Study Objective (CMF) CMF’s study looks to measure the impact of this program in 3 blocks of Murshidabad district in West Bengal. “Is Bandhan’s THP program resulting in an improvement of socio-economic conditions for these ultra poor households?”

Program and Intervention Design Aim: “graduate” the poorest of the poor to microfinance Treatment households get to choose an income generating asset, and receive an allowance for weeks depending on the asset selected Types of assets include livestock such as cows, goats, pigs, or a combination of these, as well as non-farm enterprises. In approximately 18 months after receiving the asset and successfully retaining it, beneficiaries receive graduation training

Major findings Consumption Increase in food consumption for treatment group mean difference of Rs. 64 per person per month Incomes Treatment Household income/per person increased by Rs 78/month (22%) over control.

Major findings Time Use Adults in treatment households work more hours per day, on average, than adults in control households

Additional findings: Non monetary transfers and financial indicators  transfers / crowd out  treatment gives approximately 1 more meal per month (10% of mean) to other households  receive 50% less food gifts than control (Rs. 13 vs Rs. 30 per month)  financial variables  no effect on credit (increased interest in borrowing)  increased formal savings (through Bandhan), not necessarily increased total savings

Additional Findings: Financial Behaviour and Confidence Treatment households appear to borrow less from formal and informal sources, but the finding is not statistically significant. Households score higher on an index of financial autonomy (can women take decisions on assets/operating savings accounts/household spending decisions) Households express higher confidence in their ability to take loans and join savings groups Possibly affected by survey connection with Bandhan

Findings: Food Security Treatment households report lower food insecurity than control households –Adults less likely to skip meals –Households are 7% more likely to report that they eat enough every day Treatment households show higher self-perception of their household situation

Cost Benefit Analysis Cost $ 331/beneficiary household Monetary benefit estimated to be an income gain of $90/household/year Will these gains persist over time?

Conclusion positive effects 18 months after asset transfer –on consumption –other measures of well being (food security, emotional health) non-agricultural enterprises appear important in income generation

Open Questions Scale up from 3000 households to entire districts. The role of monitoring and continual handholding and feedback Can state governments and livelihood missions adopt some form of the program?

Research Team Dr. Abhijit Banerjee, Dr. Esther Duflo, Dr. Jeremy Shapiro (MIT/JPAL) Dr. Raghabendra Chattopadhyay (IIM-C) Sudha Kant, Lakshmi Krishnan, Jyoti Mukhopadhyay, Abhay Agarwal, Deeptha Umpapathy, Projjal Saha (Centre for Microfinance)