EFFECTIVE APPROACHES FOR REACHING THE VERY POOR

In 2000, the US Congress passed the Microenterprise for Self-Reliance Act, which mandated that
half of all USAID microenterprise funds benefit the very poor. This legislation was amended in
2003, and now defines the very poor as those living on less than $1 a day, or those living in the
bottom 50% below their country's poverty line. The PAWG has been engaged in an effort over the
past two years to develop tools for poverty assessment. This process is well underway.

The PAWG recognizes that the next step will be to identify effective approaches to reaching the
very poor so that organizations who are interested in doing so will have guidance and examples as
to how to accomplish this goal if they are not already doing so. We are using the definition of very
poor as the one described above in the legislation.

This listserv discussion is meant to accomplish the following:

1. Stocktaking exercise on current programs that attempt to reach the very poor and the
methods they use to do so
2. Identify the most relevant reading materials that are currently out there to create an
annotated bibliography for practitioners who are interested in learning more about this topic
3. Identify helpful websites: i.e. CGAP has an excellent poverty outreach page on its website at
http://www.cgap.org/priorities/poverty_outreach.html
4. Begin to identify the common approaches and strategies that are particularly effective in
reaching the very poor

To begin the discussion, the compilation of institutions below serves to illustrate the point that there
is no one way of either identifying or targeting the poor. Although some institutions share
similarities across programs, the spectrum of institutions is broad, with identification methodologies
ranging from self developed assessment tools to geographic and group specific identification.
Similarly, institutions vary in the tools used to combat poverty from the standard credit model, to
savings, grant, business training and asset transfer models among others. This chart is by no means
complete. I would like for you to add other programs that should be on this chart because they have
a PRODUCT and/or an APPROACH that is effective in reaching the very poor. Please also feel
free to comment on the current programs that are in this chart – if you know from experience that
one of these program’s approaches is not actually effective in reaching the very poor then please let
us know. These programs are listed mostly because of literature that has been read about them.
Name Model Target Targeting Methodology Other
Group / Approach
Trickle Up Grant/Savings Poorest Use Trickle Up Poverty
Assessment Tool in
selecting the poorest in
a community via an
array of economic and
social indicators
International Grant/Savings Refugees Focuses on those Offer business skills
Rescue whose lives have been training.
Committee uprooted or affected by
(IRC) violent conflict and
oppression
BRAC Grant Vulnerable/ TUP initiative focuses Asset transfer and
(Targeting non-poor to on women who own no subsistence allowance;
Ultra Poor); Ultra poor land, have little or no employment and
Savings/ income and are enterprise
Credit widowed or divorced development training;
social development
support; essential
health care support;
access to microcredit
after two years
ADRK Grant/Credit Farmers 25% of equipment cost Training and technical
Burkina Faso without has to be repaid over 5 assistance is free
equipment years and serves as
down payment for new
equipment loan
Caritas Grant/Credit Small Focus on day laborers Free installation of
Bangladesh farmers & who offer their services pumps and technical
landless to whoever pays them assistance.
people any salary no matter
how small; also focus
on tribal people and
women. Program
centers on furnishing
hand pumps for
irrigation to be paid
back in 24 months.
Have to cover 50% of
down payment.
Name Model Target Targeting Methodology Other
Group / Approach
ARC – Sierra Grant/Credit Women & Three step program Refuge to return
Leone refugees combining grant and program provides
loan products and clients with certificates
business development and credit history
training enabling them easier
access to credit in their
home countries
Ashrai – Savings/ Indigenous; Focus on the Adivasis Savings mobilization,
Bangladesh Credit landless (mostly landless and institution building,
illiterate) whose literacy interventions
average income is $50
per year
Luceana – Credit Rural Luceana supplies credit Community retains
Cambodia farmers to 61 Credit interest/collateral from
Communities whose borrowers and is able
number ranges from 50 to use the interest for
to 150 people community purposes
Freedom Credit Very Poor Help small groups of Provide education to
from Hunger Women women (around 25) women at weekly
(Credit with vulnerable secure a loan. Instead meetings consisting of
Education) to chronic of collateral, the health, nutrition,
hunger women co-sign for family planning and
each other sound business
practices
Pact Savings / Women, Enables women to WORTH starts with
(WORTH Credit refugees, build transparent literacy, numeracy,
program) HIV/AIDS savings and credit savings and action
groups through village oriented learning
banking model
SafeSave – Savings / Slum Work in the slums of Send a collection
Bangladesh Credit dwellers Dhaka mainly officer everyday to
clients to see if they
want to save that day.
Returns the money if
needed for expenditure
and issues loans
against future savings.
No fixed repayment
schedules.
Name Model Target Targeting Methodology Other
Group / Approach
CBDIBA – Savings / Poor In addition to savings
Benin Credit / Non and loan services, they
financial also provide literacy
services training and
information on legal
rights to clients
FINCA – Savings / Poor; Focus on key areas of Advocate solidarity
Uganda Credit HIV/AIDS competency i.e. groups as support
microfinance services mechanisms for
and broadening the families coping with
portfolio of these HIV/AIDS
services to clients
PACT – Health Poor Work in poorest region Reinforced client
Myanmar insurance in Myanmar. Project loyalty to the
provides health and life microcredit program
insurance for by providing these
microcredit clients and additional insurance
is funded through their services and improved
premiums distribution of basic
drugs at the village
level
Freedom Health Very Poor Pilot program in Selected contracted
from Hunger insurance Women Uganda features pre- providers will provide
– Uganda vulnerable paid healthcare using a insured services
to chronic model developed by directly to members in
hunger Health Partners / exchange for a
Uganda Health monthly per capita fee.
Cooperative. Administration is
simplified as there are
no claims or billings.
Alternativa Savings / Only State of Chiapas in Noticed that families
Solidaria Credit / Life women; Mexico has highest were going into debt to
Chiapas - insurance rural; incidence of poverty in pay for burial services
Mexico indigenous country. Most of the if client died. Now has
population is an arrangement with
indigenous and have Zurich Insurance for
lost their lands clients to pay $10
annual premium for
life insurance coverage
of $1,000. AlSol
collects weekly
premiums of 20 cents
from their clients to
pay for this.
MEDA – Business Home Seeking to overcome
Pakistan Development confined social barriers in the
Services women embroidered garment
value chain by enabling
microentrepreneurs to
reach affluent
customers in higher
value markets through
the use of mobile
female sales agents
Catholic Learning Rural poor Use Adult Education
Relief Conversations Principles to get
Services; villagers to discuss
Freedom problems pertaining to
from Hunger their own lives without
– India the need for a
facilitator, thereby
making them self
reliant
Helzi Internal Poor ILS is a participatory Currently being used
Noponen Learning impact assessment and by three NGOs in
System (ILS) planning system for India: PRADAN, ASA
community and The Handloom
development programs Weavers Development
primarily designed to Society
meet the learning needs
of program
participants, village
groups and operational
field staff.
Women Group based Maasai Provides Maasai Also provide training
Economic credit in the women women with credit in in management
Empowerme form of cattle the form of capital that practices for cattle
nt Consort WEEC purchases in breeds that are better
(WEEC) – bulk, passing on the adapted to pasture
Kenya discount to their clients scarcity and yield
more milk. Loans are
repaid through the sale
of milk or excess
animals.
Name Model Target Targeting Methodology Other
Group / Approach
Women and Credit Poor Offers very low loan
Associations sizes ($51) with no
for Gain both preliminary savings to
Economic returning refugees
and Social around Lome and very
(WAGES) poor people in an
environmentally
vulnerable region of
Togo
International Savings / Bonded Main components of
Labour Credit / Social labour in program are offering
Organization Empowermen South Asia microfinance services
(ILO) in t / Skill to the extreme poor,
coordination training spreading social
with local awareness messages
partners and providing skill
training to upgrade
their competence or
provide an alternative
livelihood
Resource Credit / Social Poor; Current focus area is
Integration Empowermen Elderly senior citizens who
Center (RIC) t / Literacy have difficulty
– Bangladesh accessing sources of
income. RIC attempts
to establish their
creditworthiness and
provide them with
microfinance
SEF - TCP, Credit Very Poor TCP strictly targets
the women who live below
Tšhomisano² half the poverty line by
Credit first conducting
Programme participatory wealth
ranking. Thereafter
field staff go to the
poorest households to
motivate the women of
those households to
start or resume an
income generating
enterprise.
Name Model Target Targeting Methodology Other
Group / Approach
Grameen Interest-free Beggars Beggars are not
Bank loans required to give up
Struggling begging but are
Members encouraged to take on
Programme income generating
activities slowly, until
they can become a
regular member of
Grameen Bank.