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Graduation the Poorest into Microfinance
by CGAP, Ford Foundation in 2011
Community of Practice: Financial Services
The graduation methodology uses the targeting and transfer elements of safety net programs, but introduces entrepreneurial activity through training, an asset grant and credit. The key to the graduation model is the careful sequencing of several development services to facilitate consumption stability and, subsequently, enterprise development. BRAC created the graduation methodology over ten years of adaptation and learning from their IGVGD program. Their Targeting the Ultra Poor Program started in 2004 and 800,000 households have since “graduated” out of safety net programs to become successful microentrepreneurs. While their businesses are small, moving poor people from dependence on hand-outs to becoming independent earners is a gigantic leap in development terms.