What do you think of when you hear graduation?
Maybe you picture the end of a school year, a passage into a new phase of life, or an achievement that opens doors. Or perhaps you think of a cap and gown, a diploma, and a celebration with friends and family.
Lately, the word has been used in a different context: development practitioners are buzzing about a new approach to helping the extremely poor graduate from poverty.
A recent study published in Science shows the effectiveness of a comprehensive “Graduation program” and its success in elevating individuals out of extreme poverty. The authors studied programs in 6 countries—Ethiopia, Ghana, Honduras, India, Pakistan, and Peru—that target the poorest members of villages and provide them with the following:
- A productive asset
- Training on how to use the asset
- Healthcare to keep them healthy enough to work
- A small amount of food and/or money to support them while they learn to make a living
- Access to a savings account
- Weekly coaching in topics including overcoming obstacles and meeting savings goals
Using randomized controlled trials, the authors studied the effects of this bundle of interventions on a number of outcomes, including consumption, food security, productive and household assets, financial inclusion, physical and mental health, and women’s empowerment. By the end of the program—usually two years—there were statistically significant gains in consumption, food security, and household assets among the individuals who had received this bundle. Furthermore, when the target individuals were again surveyed a year after the end of the program, the authors found that these gains had been maintained.
At 2Seeds, we take this holistic approach to development. We’ve seen that simply providing our Partners with a goat or cow, or offering them a microloan, doesn’t always advance them on their journey out of poverty. By providing training on how to use their productive assets (such as livestock or agricultural equipment), as well as coaching in business concepts, we give our Partners an opportunity to achieve sustained income generation. Furthermore, by helping them set goals for themselves and start savings funds, we enable them to convert that income into real gains in their quality of life.
In the village of Kwakiliga, we’re seeing our Partners improve their lives through the graduation approach. 2Seeds invested in a productive asset for the members of the Kwakiliga group: 100 chickens and three chicken coops to start their egg production business in 2013. At the same time, training was provided on how to use the asset, including chicken care and nutrition best practices.
Within a month of egg production, the group was turning a profit, and within a year, they had accrued $2,500 in group savings, which enabled them to triple their flock of hens in 2014. Now in Kwakiliga, group members divide their profits according to an agreed plan: a portion in group savings for future business investment, a portion in take-home pay for each member, and a portion in each individual’s personal savings fund. Through these personal savings funds, 2Seeds is helping our Partners convert their income into their own vision of maisha bora – the better life – by providing a means for them to work toward tin roofs for their homes, higher-quality seeds for their farms, or seed financing for their own business ideas. One group member is saving for a motorcycle to start his own taxi business!
Additionally, the group has worked through 2Seeds’ business curriculum, which covers a variety of topics including savings management, trade offs, and basic accounting. These trainings, along with coaching and follow-up from Project Coordinators to ensure retention and application of knowledge, help our Partners responsibly manage their business finances and operations for the long-term.
We’re thrilled to see press and excitement around the graduation program and the value of a holistic, multifaceted approach to development. With over 40% of Tanzanians living in extreme poverty—on less than $1.25 a day—we must consider innovative ways to create opportunities for individuals and families to pull themselves out of poverty. One of the author’s of the paper on the graduation approach, Dean Karlan, says, “[P]overty, and especially extreme poverty, is difficult to eliminate. The poorest of the poor have more problems than just lacking a regular income.” At 2Seeds, we understand the far-reaching effects poverty has on our Partners’ lives in rural Tanzania, and we’re employing elements of the graduation approach—a scientifically proven method to poverty alleviation—to improve these conditions.
Annie Duflo, Innovations for Poverty Action’s Executive Director, says, “Governments, aid organizations, and donors have been looking for something backed by real evidence showing it can help the poorest of the world, and this Graduation approach does exactly that.”
We invite you partner with us, and watch as our Partners graduate from poverty!
Banerjee, Abhijit, Esther Duflo, Nathanael Goldberg, Dean Karlan, Robert Osei, William Parienté, Jeremy Shapiro, Bram Thuysbaert, and Christopher Udry. 2015. “A Multi-faceted Program Causes Lasting Progress for the Very Poor: Evidence from Six Countries.” Science.