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Accelerating the End of Ultra-Poverty

Accelerating the End of Ultra-Poverty

Graduating from Ultra-Poverty: An Interview with Sir Fazle Hasan Abed

by Larry Reed - July of 2017

photo: ®BRAC, Sir Fazle Abed

Graduating from Ultra-Poverty: An Interview with Sir Fazle Hasan Abed, KCMG

Sir Fazle Abed, Founder and Chairperson of BRAC, participated in the RESULTS International Conference in July of 2017, both in a plenary interview with Joanne Carter, Executive Director of RESULTS and in a one-on-one interview with Larry Reed, Senior Fellow for Financial Inclusion, RESULTS. The text below provides a briefly edited compilation of those interviews.

What does the face of ultra-poverty look like in Bangladesh?

Ultra-poverty looks like a woman-led household, with children. The woman does not have many skills, so she would get domestic work or very low-paying agricultural work. She doesn’t get paid properly. She probably gets food in exchange for her work. She shares her food with her children, so she’s half-fed and her children are half-fed. She’s in a trap and doesn’t know what to do. She can never build up a surplus of resources and she will not be able to send her children to school. At age seven or eight, her children get sent to other homes to become domestic workers, and she will find a way to survive. So, that is what the life of a woman trapped in ultra-poverty looks like.

She also wouldn’t have many friendships in her village. Because she’s poor, most people think she’s going to ask for help, and they will avoid her. That’s one of the big problems: she has few friendships. She has no one else to rely on.

My conception of ultra-poverty is that she’s trapped, people avoid her, she’s marginalized, her relationships are very fragile. This poverty passes from one generation to the next. Her children start working at seven or eight, they have no school, they would also be at the bottom of the pyramid. They are malnourished; they are stunted. They end up repeating the cycle, because with no education they cannot get good jobs, so they also become domestic workers or low-paid agricultural workers.

Were the women living in these conditions participating in your microfinance program?

I remember in 1995 we thought that we had covered everybody with microfinance (MF) and that microfinance was having a great impact on everybody. But a survey was done in Bangladesh and we found that 10 percent of the poorest Bangladeshis didn’t have access to microfinance. So we wanted to find out why was this, because our microfinance was focused on poor people. But then we found that the poorest are excluded. We found that the poorest people didn’t think they could profit from using financial services. Secondly, they wouldn’t be able to repay the money. Then thirdly, there was the group within the village who were poor, but they thought that this group was too poor to be able to repay their loans. Borrowers in our microfinance program said, “No, no don’t touch them because they won’t be able to repay their loans.” So these people were excluded from participating in microfinance.

They’re trapped – trapped in a sense that they can’t get out of poverty with government programs or other programs by microfinance organizations, non-governmental organizations (NGOs) and so on. So we needed to design a program to get them out of poverty.

What were the key components of the program you designed?

First, we had to identify the poorest people in the village. We involved the village itself. The villages worked with us to identify households and participated in a wealth ranking exercise, which identified the poorest 10 percent of people. We held this as an open session with the entire village where they decided who the poorest people are living among them. Then our workers went to these households to find out whether they were in fact the poorest. If they found they were so, we took them in.

Next, we provided them not with a loan, but a grant, an investment. We called it a transfer of assets. It could be a cow, it could be half a dozen goats, and so forth; something that could give them a way to earn an income. Thirdly, we provided them a stipend so that they could sustain themselves in the time before they start earning income. Fourthly we provided them training, one-on-one coaching, and taught them to save money and build this habit. We also provided access to health care.

We supported them in this way for two years. We also put their children in school. We didn’t want their children to continue the cycle of poverty. This is the combination of interventions that BRAC gave each family. It cost us approximately US$500 per family. After two years, they were on their own. It was a program that was designed for two years and after that, they were supposed to get out of poverty gradually over time. We called it graduation because they were supposed to graduate out of poverty.

How did you come up with this combination of services for people living in ultra-poverty? How did you figure out the package and the sequencing of things that was needed?

Basically, these were the things we knew we could do. Except for the health care; we didn’t start with a health care program for everybody. But then one or two of our early clients had problems with health and didn’t know how to deal with it and we said, “Alright, we’ll look after it.” After that we provided a doctor and the consultation fee was covered by BRAC. We also made it free for them to get whatever medications they needed.

How did you decide that regular coaching would be a key part of the approach?

One of the effects of ultra-poverty is low self-esteem. I told our staff, “You have to build up their self-esteem, their sense of self-worth.” We tried to implement what Paulo Freire says, that people should be the subject, not the object. Self-esteem is very important to being able to move out of ultra-poverty. That journey requires the psychological strength to say, “I can do this.”

So, the coaching became very important because it helps build self-confidence. Many of them were not financially literate, but they learned that if they saved so many taka [Bangladeshi currency] each week it would enable them to do more.

You’ve told us before that you found that savings to be an essential first step in development, otherwise people couldn’t think about the future.

Saving is about the future, without that, they are just thinking about today. Saving is very important. Saving means that they are really thinking about the future and how their situation might improve.

What have been the results of this program in Bangladesh?

More than 90 percent of the women who have participated have been able to graduate into their own livelihoods. We also found that the program succeeds in bringing the participant back into the mainstream of the village with strong relationships. After she has her cows, and her business, everyone wants to know her. Most of these women will say, “They didn’t want to invite us for weddings and so on, and now they do.” Her status has changed. People used to avoid her before, now they talk to her. So that in itself is uplifting for her.

We have now graduated 1.7 million families. A little while ago, the London School of Economics did a study that showed that even five years after a family had left the BRAC program, they continued to improve their condition compared to the control group. They have continued to improve themselves rather than leveling off economically. There seems to be some change that happens to people that propels them to continue working hard to improve themselves.

Has anything surprised you about the results of the program?

When I first started thinking about this program and started doing some pilots before 2002, I never thought they would graduate out of poverty and go on improving themselves. That’s something that surprised me. Not only are they doing well, but each year they were advancing, with a higher level of consumption and income. Even five years later.

I also thought that after they finished and graduated they would become our microfinance clients. What I found is that almost half of them didn’t want to borrow. They were quite happy with their savings and assets. But then after a little while they would gain confidence and start borrowing to expand their livelihoods.

A program that reaches 1.7 million people is huge. What lessons do you have for others about building for scale?

To me, scaling up is very important. Otherwise you don’t really have an impact. Remaining small and beautiful is not my philosophy. I’m all for big and impactful. That’s what we need if we want to end poverty. We want everyone to come out of poverty, so it’s important to scale things up.

The way I scale up, I first do a small program and make it effective. Then I try to make it efficient. The way I try to make it efficient is by cutting down the inessential tasks and focusing on the essential tasks, making it as efficient as possible. Then we can scale up things regionally or nationally. I have to convince donors; I have to find the money, so I have to show that the results are good on a small scale. As it grows we also have to go on innovating so that it continues to be more and more efficient.

You also have to have the capacity within your organization to be able to scale up. The first thing to do is to have a good human resource department that can recruit people and a good training department that can train all the people that you will need. Then you need a good accounting and audit department so that you can keep track of all the money that you are going to spend. All these things have to be done with a view to scaling up.

What has happened with programs in other countries that have adopted this approach?

The CGAP program of the World Bank and the Ford Foundation saw the success of this program, and they replicated it across ten sites in eight countries. They also paid for a number of randomized controlled trials to test the effectiveness. The results of these studies, done by MIT (Massachusetts Institute of Technology) and Yale University, were published in Science in 2015. (1) The results showed positive benefits to clients and a positive return on investment.

Nicholas Kristof came out with an article in The New York Times that said the studies demonstrated the power of hope. Poor women, heads of households, have always suffered from lack of resources, but now were suddenly getting a big push in terms of resources, health, training, getting their children to school. (2) With these resources, they saw that their life can be changed by their own work.

Now other NGOs and national governments are starting to implement this approach. I think there are more than 50 replications around the world in more than 30 countries.

What do you hope to see in the future as other countries adopt this approach?

We know that this is not the only answer to the problem of poverty in the world. But we do know that this is a proven way to tackle ultra-poverty, particularly for families who have been trapped in poverty. We want to see this spread to every country that struggles with ultra-poverty, and we are willing to help share what we have learned with anyone that wants to employ this approach. So, that is what we are trying to do.


  1. 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, May 15, 2015.
  2. Kristof, Nicholas. “The Power of Hope is Real”, The New York Times, May 21, 2015.