Despite global efforts to reduce poverty, as of 2024, nearly 700 million people live in extreme poverty on less than $2.15 per day. For many, poverty is multidimensional, relating to gaps in education, health, and living standards that can “trap” households in extreme poverty for years.
The Graduation approach seeks to address these overlapping dimensions of poverty with a multifaceted intervention to transition households from chronic vulnerability into more stable livelihoods. The program offers households a set of sequenced components, typically over 18-36 months. The core components of the Graduation program are: (i) provision of seed capital in the form of a cash grant or one-time transfer of productive assets; (ii) training on business-related or other skills to start or expand a viable livelihood; (iii) consumption support to ensure participants can meet basic needs while establishing a new livelihood; (iv) access to financial services to build income-earning opportunities and savings; and (v) ongoing mentoring to provide empowerment and life-skills coaching. Each component helps participating households overcome one or more of the challenges of poverty, enabling them to take full advantage of the other components and generate sustained improvements in their livelihoods.
As discussed in this policy brief, the Graduation approach has been implemented in numerous settings, rigorously evaluated in multiple randomized controlled trial (RCT) evaluations, and has consistently been found to increase households’ standard of living. As of 2023, the program model has been implemented in fifty countries worldwide and is estimated to have reached 14 million people. Over the years, multiple Development Innovation Ventures (DIV) investments have helped to refine the Graduation Approach, generate further evidence, and pursue public sector scaling in new contexts as discussed below.
DIV Awards to Support Model Refinement and Evidence Generation
In 2014, DIV awarded Bandhan-Konnagar a Stage 2 grant to expand its “Targeting the Hard-Core Poor” (THP) Graduation program designed to support households to develop sustainable livelihoods and transition out of extreme poverty into the Indian states of Bihar and Odisha. Over the course of the DIV award, Bandhan-Konnagar successfully implemented the THP program in Bihar and Odisha with 4,350 households as discussed in the final report. As of 2024, the THP program is operating across 13 Indian states. Subsequently, a long-term follow-up of a previously conducted RCT found that the THP program’s impacts were sustained through 10 years after the initial asset transfer, indicating that the program produces sustained, long-term improvements in participants’ economic well-being that far exceed the program’s cost.
In 2017, DIV awarded Instiglio a Stage 2 grant, to design and implement a development impact bond (DIB) to expand Village Enterprise’s streamlined Graduation program in Kenya and Uganda. Village Enterprise’s program provides business training and mentoring, a capital grant to start a business, and a savings mechanism with the aim of transitioning participating households out of extreme poverty. Village Enterprise implemented its Graduation program with nearly 14,000 individuals in 241 villages in rural Kenya and Uganda. An independently conducted RCT evaluation found that Village Enterprise increased both household consumption and net assets by approximately six percent roughly two and a half years after households started the program. The evaluation verified achievement of the program’s intended outcomes, provided replicated evidence of Village Enterprise’s effectiveness and added to the evidence base around the cost-effectiveness of poverty Graduation approaches.
In 2024, DIV awarded a Stage 2 grant to researchers at Harvard University to work with the Government of Indonesia to innovate and test the design of its PENA (Economic Heroes) program, which is a social protection program inspired by the evidence-based Graduation approach. The researchers, in partnership with J-PAL Southeast Asia, the Government of Indonesia, and co-investigators from the Massachusetts Institute of Technology, will conduct a randomized controlled trial (RCT) to rigorously evaluate several variations of PENA to understand: (1) whether it is more effective at improving key outcomes than current social assistance programs; (2) how to identify people who have the highest potential to graduate from social assistance programs; (3) which program variations are most effective; and (4) whether such programs can be made easier to scale without compromising effectiveness.
DIV Awards to Support Public Sector Scaling
In 2023, DIV awarded a Stage 3 grant to Village Enterprise to partner with the Government of Rwanda to implement its streamlined Graduation program with 21,000 Rwandan households and train government staff to lead implementation of a pilot program with an additional 8,000 households. Village Enterprise will work with the Government of Rwanda to raise an additional $15 million to support the government's nationwide adoption and scaling of a graduation program rooted in Village Enterprise's approach with the goal of ultimately transitioning the program to full government-led implementation.
In 2024, DIV awarded a Stage 3 grant to BRAC, which pioneered the Graduation approach in Bangladesh, to work with the governments of Indonesia and the Philippines to integrate the Graduation approach’s core interventions into current poverty reduction strategies, programs, and budgets. BRAC staff will work alongside government counterparts to train frontline workers on Graduation implementation and coaching, support program development, improve data collection systems, and conduct research on key design and implementation processes to identify the most effective pathways to scaling through governments.
In 2024, DIV announced a Stage 4 partnership with USAID Bangladesh to implement the Graduation approach as part of a $72 million program to provide holistic integrated support for the communities that are hosting Rohingya refugee camps in southeastern Bangladesh.
Related DIV Awards
2014 Stage 2 Award to Bandhan-Konnagar: Scaling-up Targeting the Hard-core Poor (THP)
2017 Stage 2 Award to Instiglio: Village Enterprise Development Impact Bond
2023 Stage 3 Award to Village Enterprise: Scaling Sustainable Poverty Graduation
2024 Stage 3 Award to BRAC: Scaling Government-Led Graduation Programs to Alleviate Poverty
2024 Stage 2 Award to Harvard: Evaluating a Social Protection Program to Reduce Poverty
2024 Stage 4 Partnership with USAID/Bangladesh: Development Innovation Ventures Launches First Partnerships Under Initiative to Scale Evidence-Based Innovations Across USAID
Key Publications and Resources
Policy Brief: Building Stable Livelihoods for Low-income Households
Report: Scaling up of the Targeting Hardcore Poor Program in India
Report: Village Enterprise Development Impact Bond Evaluation Findings
Publication: A Multifaceted Program Causes Lasting Progress for the Very Poor: Evidence from Six Countries
Publication: Long-Term Effects of the Targeting the Ultra Poor Program