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Financing Growth
Financing Growth

Pursuing an Evidence-Based Approach to Ending Extreme Poverty

Wed, May 10, 2017
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Dianne Calvi
Author Bio
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Jacqueline Bass
Author Bio

Providing a sustainable path out of extreme poverty requires a comprehensive and multi-sectorial approach. Led by FHI 360, the Feed the Future Community Connector (CC) project in Uganda was designed to improve living standards of vulnerable households, particularly the extreme poor, with a focus on women, children, and youth. By integrating health and nutrition interventions into the Village Enterprise Graduation program, Community Connector empowered the most vulnerable women and youth to lift themselves out of poverty and invest in healthier futures. 

Village Enterprise implements a cost-effective, group-based, entrepreneurship-focused Graduation program for rural Africans who live on less than $1.90 per day. The lives of the extreme poor are characterized by social isolation, food insecurity, unreliable incomes, lack of assets, and low self-confidence, which makes make reaching and empowering this population challenging. Success requires high-touch, multidimensional solutions like those pursued by CC. 

Traditional livelihood improvement programs may have the potential to improve lives, but families living in extreme poverty need transformation, not just marginal improvements. Graduation programs like Village Enterprise’s do just that. The Village Enterprise Graduation model combines savings support, technical skills training, cash transfers, and business and life skills coaching to address the multidimensional nature of poverty. Graduation programs are increasingly becoming recognized in the development sector as a high-impact and sustainable approach to alleviating extreme poverty.

A randomized controlled trial (RCT) published in Science magazine (May 2015) evaluated six Graduation programs in varying contexts and found positive sustainable impact. Village Enterprise is currently wrapping up its own two-year independent RCT with Innovations for Poverty Action, with results to be published in 2017. Midline results were promising, and final results will likely support the growing body of evidence that Graduation programs sustainably lift families out of extreme poverty.

Graduation as an Integrated Approach

As evidence of the impact of Graduation programs grows, there is increasing interest in integrating the model with other interventions. Village Enterprise’s integration into CC is proof that integration can have a multiplier effect.

Initially, CC targeted participants through existing community groups (e.g., VSLAs and producer groups) of 25-30 members registered with local governments. However, this process failed to reach the extreme poor because social isolation and low self-confidence often prevented this population from self-mobilizing. To ameliorate this, CC and Village Enterprise introduced Village Enterprise’s rigorous household-level targeting process. This process involves a community-based Participatory Wealth Ranking exercise to identify the poorest and most vulnerable then verifies findings using the Progress Out of Poverty Index (PPI) to ensure that the most vulnerable households receive programming.

Infusing CC with Village Enterprise’s livelihoods curriculum empowered participants to invest in healthier futures. Savings With a Purpose [1] (SWAP) contributed tremendously to CC’s objective of increasing household savings. Saving weekly for a specific item empowered households to accrue increased savings through intentional and regular practice. Success in SWAP not only encouraged households to adopt a habit of saving, it also increased individual agency and ability to hope and plan for the future. Ultimately, SWAP contributed to a 256 percent increase in household savings.

Overall, households that were part of Village Enterprise’s CC implementation area were much less likely to be living in extreme poverty at the end of the one-year program, realizing a nearly 50 percent average increase in PPI score between entry and exit. Health and education indicators also significantly improved. There was a 160 percent increase in households with hand-washing facilities, a nearly 40 percent increase in weekly protein consumption, and significant gains in primary school attendance.

But the impact of Graduation goes well beyond the household: CC lifted individual families from poverty while also laying foundations for change in entire communities. Linking budding entrepreneurs through networks increased economic activity, providing new financial, social, and human capital to drive value chain integration, diversification, cooperatives, scaling, and more.

The Case for Ending Extreme Poverty

Economic growth that fails to reach the extreme poor is inefficient. The case for ending extreme poverty goes beyond moral and ethical responsibility. Increasing the number of people able to participate in an economy also increases the number of people who contribute to it. Incorporating Graduation programming into integrated approaches ensures better results as demonstrated by the success of CC. Approaches like these ensure that the more than 40 percent of Sub-Saharan Africans who live at the very bottom of the pyramid have the opportunity to lift themselves from extreme poverty. In doing so, we can unlock the promise that comes from transforming the lives of potential entrepreneurs and innovators.

[1] SWAP is an innovative design implemented by CC to improve the efficiency and impact of community-level savings on livelihoods through targeted savings for productive assets and income generation. The approach benefits from accountability to peers about the pre-determined purpose of savings and group-level commitments.

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Dianne Calvi is President and CEO of Village Enterprise, an organization working to end extreme poverty through entrepreneurship and innovation in rural Sub-Saharan Africa. Since joining Village Enterprise in 2010, Dianne has grown the size and depth of the organization’s impact by focusing on strategic partnerships, innovation and technology, rigorous monitoring and evaluation, and building a highly qualified East African team. Dianne previously held leadership positions in NGOs, technology companies and on several nonprofit boards. She graduated with a BA from Stanford University and a MBA from Bocconi University (Milan, Italy) on a Rotary Ambassadorial Scholarship.

Jacqueline Bass is a manager and technical expert with 30 years of experience advising donors, financial institutions, foreign governments, non-profits, and private industry to support economic development, gender, and youth initiatives. She has implemented more than 80 projects across developing countries focused on enhancing sector competitiveness and improving local capacity to design, implement, and integrate market-driven interventions that stimulate pro-poor economic growth promoting livelihoods, food, and nutritional security particularly for vulnerable populations and households. As a recognized national and international expert, she has been invited to teach international development courses at The American University and Southern New Hampshire University and to train public sector officials at USAID and IDB on how to make markets work for the poor.

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