Let’s begin with the good news: The international community has taken unprecedented measures to respond to the humanitarian crises triggered by COVID-19.
By Lindsay Coates
This piece was originally published here in NextBillion. It has been reposted below.
Since March 2020, 212 countries and territories have enacted over 1,100 social protection measures to mitigate harm from the pandemic for the most vulnerable people. Most governments recognize the urgency of an effective response and have taken proportionate fiscal measures, now estimated to total almost $12 trillion worldwide.
However, even these massive efforts may come up short. With the number of people suffering acute hunger set to double to 265 million people by year’s end, and confirmed COVID-19 cases now exceeding 40 million, the scale of current responses is still not enough. And though the political will and finances to fund social safety nets exist at a global level, individual low- and middle-income countries face resource constraints. What’s more, most of these recent social protection programs are reactive and short-term, and current international development assistance is insufficient. Many programs do not reach those most in need of support, nor do they address the long-term needs of people in extreme poverty.
What we need now is not a disconnected series of COVID-19 response measures, but instead comprehensive, universal social protection systems. Governments must invest in a robust emergency response, but approaches must be adaptable and inclusive – and they must prepare the most vulnerable populations for future economic, health or environmental shocks. Below, we’ll discuss how the Graduation approach to poverty alleviation can play a role in helping these communities and their broader economies recover from the pandemic.
Improving targeting of people in extreme poverty through the Graduation approach
People in the most extreme states of poverty are both the most in need of social services and among the hardest groups to reach. Many low-income populations in the Global South are employed in the informal economy – including around 86% of workers in Africa and 68% in Asia. During COVID-19, governments have struggled to provide assistance to poor households without permanent addresses or national IDs.
Low-quality data on national poverty in many low-income countries makes identifying and targeting extremely poor people with government programs even more challenging. International Growth Centre research on social assistance programs in 123 countries found that even before the chaos of the pandemic struck, only 15% of the total population of low-income countries was protected by at least one social assistance program. And these programs do not target the poorest people: Only 21% of the poorest quintile within low-income countries are covered by social assistance at all.
For the first time since 1998, global poverty rates are rising. With almost 700 million people in extreme poverty worldwide and up to 150 million more predicted to fall back into extreme poverty by the end of 2021, it is urgent that governments adapt their social protection systems to target the most economically vulnerable populations. The Graduation approach, pioneered by BRAC in Bangladesh in 2002, is a viable pathway to improve these systems. Graduation is a sequenced set of interventions that addresses the needs of people in extreme poverty holistically by supporting participants with a productive asset transfer, skills training, consumption support, coaching and linkages to government services. By specifically targeting people in extreme poverty with a multi-step process tailored to local data, needs and capacity, Graduation helps bring previously unreachable populations into government safety nets.
The explicit focus of Graduation on the poorest segment of a country’s population and its emphasis on localized, adaptive targeting makes it possible for governments to reach more people in dire need. This targeting process can involve the combined use of national registries (depending on data quality), proxy means testing and participatory community wealth ranking, with targeted verification surveys to minimize errors.
By leveraging data governments already have and combining it with self-identification, community participation and survey verification, the Graduation approach makes it possible to find those in extreme poverty. It is then possible to connect these extremely poor households to government services, improving the targeting of existing social protection programs. By collecting data on vulnerable populations through Graduation programming, governments can strengthen their emergency responses as well. For instance, in Bihar, India, the state government’s Satat Jeevikoparjan Yojana Graduation program, supported by J-PAL South Asia, provided data on extremely poor households which has allowed the government to reach 39,000 people with phone surveys and cash transfers during the pandemic.
For an inclusive recovery from COVID-19, governments will need to identify and reach the most vulnerable – or we risk leaving millions more behind. Integrating the Graduation approach into existing social protection systems facilitates this effort, and uses delivery of emergency aid to build toward longer-term solutions. But this is only half the battle. To truly build back better, governments must also help people in extreme poverty prepare themselves for severe shocks before they happen.
Building resilient livelihoods during COVID-19: A case study from the Philippines
This pandemic has made the need to help the most vulnerable build resilient, sustainable, long-term livelihoods painfully clear. Market closures and lockdowns have brought much of the economic activity low-income households rely on for survival to a jarring halt. Shutdowns have led to lost income on a shocking scale, with nearly half of the 3.3 billion workers worldwide at risk of losing their livelihoods. In the third quarter of 2020 alone, the International Labour Organization projects a 12.1% loss in global working hours – the equivalent of 345 million full-time jobs.
This loss of livelihoods – combined with social safety nets which often exclude the poorest people – has sent millions to the brink of starvation. The UN World Food Programme has warned that nearly 265 million people are at risk of facing severe food shortages and starvation by the end of the year, almost twice the number of people suffering from food insecurity before the pandemic, because of income and remittance losses. Economic inclusion for extremely poor people which builds shock-resistant livelihoods and resilience is more than a matter of finances – it is a matter of survival.
The Graduation approach includes several unique mechanisms which prepare participants to better weather crises on all scales, from personal disasters to global catastrophes. We can see how Graduation has increased resilience through the case study of how the Philippines Department of Labor and Employment’s Graduation program, in partnership with the Asian Development Bank and with technical assistance from BRAC’s Ultra-Poor Graduation Initiative, has adapted and supported participants during COVID-19.
Crucially, Graduation strengthens extremely poor households’ economic resilience by providing training on asset diversification. Rather than relying on low-wage informal labor, participants are guided through the process of setting up multiple streams of income from diverse agricultural and commercial activities. When one income source fails, they have others to fall back on. As of July 2020, 76% of participants in the Philippines were able to continue earning an income even during lockdown through multiple means, including agricultural labor, selling fruits and vegetables, and producing and selling charcoal.
In addition to helping participants develop varied income streams, Graduation helps them create a buffer against shocks by increasing savings. Graduation coaches link them to local financial service providers and offer financial literacy training, encouraging saving and long-term planning. During COVID-19 lockdowns in the Philippines, 75% of participants used their savings to support their households, while only 20% took out loans. (For comparison purposes, at the start of the program, only 29% of participants reported having savings.)
Self-sufficiency in income and savings ensures that people in extreme poverty can provide for themselves to some extent, even during a crisis like COVID-19. Graduation also increases the effectiveness of existing social assistance programs by connecting previously excluded households to government services. In the Philippines, 96% of Graduation pilot participants received cash assistance from the national government. Graduation coaches are serving as an important linkage between participants and their local governments. If participants receive aid in the form of financial support from the government, the coaches record and track this information in order to build on the saving practices taught throughout the program. On average, cash assistance programs in lower-middle income countries reach less than 70% of the poorest quintile of the population, making this level of coverage particularly encouraging.
The path to a resilient recovery
The government-led Graduation program in the Philippines demonstrates the impact of correctly identifying people in severe need, connecting them to social protection systems, and helping them build shock-resistant livelihoods. The approach does more than improve access to emergency aid and provide for basic health and nutritional needs. It empowers participants to escape the poverty trap and become agents of change in their households and communities.
To mitigate economic disasters of this magnitude and prevent them from harming millions of the world’s most vulnerable people, governments must strengthen existing social protection systems. Even the most generous programs are missing the people who need help the most. As a result, hundreds of millions of people globally are being left behind, and those that receive support often only get it after disaster has struck. Policymakers and the development community need to design better-targeted poverty eradication programs with a long-term focus that enable marginalized groups to become more resilient and self-sufficient. The Graduation approach provides a path to do that.
Lindsay Coates is Managing Director at BRAC’s Ultra-Poor Graduation Initiative.
As the COVID-19 crisis takes a massive economic toll, financial inclusion will be critical to helping the poor recover. Microfinance institutions should work in tandem with businesses to build community resilience and boost economic growth.
By Lewis Temple
This piece was originally published here in Business Fights Poverty. It has been reposted below.
COVID-19 has impacted nearly everyone around the globe, but its impacts are particularly acute for people in poverty. As governments restrict gatherings, health authorities recommend social distancing, and markets panic, the outbreak poses a disproportionate threat in the Global South.
At the same time, many microfinance institutions (MFIs) face threats to staff safety and operational viability, threatening access to financial inclusion. Microfinance is a crucial tool for poor households to smooth consumption, invest in small businesses, build resilience, and cope with shocks—shocks that today threaten to plunge half a billion people into poverty and jeopardize decades of progress towards the Sustainable Development Goals (SDGs) from governments, civil society, and the business community. Drawing on BRAC’s experience lending in crises, here are three ways that MFIs and businesses can partner to invest in local economies and communities as they face COVID-19.
1. Reinforcing financial resilience
Lockdown measures and social distancing regulations have drastically impacted people living in poverty. A recent rapid assessment by BRAC in nine countries across South Asia and sub-Saharan Africa revealed the majority of respondents are experiencing food insecurity and sharp drops in income, and a similar survey in Bangladesh suggested household incomes have declined by 69% in urban areas and 80% in rural areas. Access to credit is critical to enable families to keep small businesses afloat and cover necessary expenses such as nutritious food, medical care, and school fees.
While social distancing regulations pose challenges for continued lending, MFIs can take several immediate steps to support families affected by the crisis, such as offering revised repayment schedules and waiving interest for borrowers struggling to repay loans. In the aftermath of West Africa’s Ebola outbreak in 2014, BRAC created flexible repayment schedules for borrowers in Liberia and Sierra Leone. In a retrospective case study, BRAC found this helped borrowers bounce back after the crisis and resume businesses, ultimately enabling them to pay back their installments and take out new loans. By working hand-in-hand with businesses, MFIs could create more flexibility for clients in crisis and amplify the impact of these measures on local economies.
2. Engaging frontline staff
While many MFIs have closed branches and suspended loan collections and disbursements in order to safeguard clients and staff, frontline staff can still play a role as the pandemic continues. As the COVID-19 crisis escalated this spring, BRAC paused microfinance operations across seven countries for various durations in consideration staff and client safety and in line with local directives. But it has continued to pay salaries for its 34,000 frontline staff despite branch closures.
In a post-Ebola assessment, BRAC found that paying staff through closures reassured field-level staff that their jobs would still be intact after the epidemic, and as a result, they maintained regular communication with clients, helping to maintain relationships and enabling staff to more quickly re-deploy. This helped BRAC smoothly resume operations as the crisis wound down and rapidly serve clients in critical need of credit to aid in their financial recoveries. Following a similar approach for the COVID-19 pandemic, MFIs can work with businesses to invest in frontline staff and help accelerate the recovery process for the communities where they work once the crisis subsides.
3. Building public health awareness across communities
MFIs and their frontline staff can also play a vital role during the pandemic that is beyond their usual scope: Spreading life-saving information. Public health awareness is undoubtedly key to minimizing the health and economic toll of the pandemic, and community-based MFIs are well positioned to raise awareness among client communities that may not have access to the internet or reliable information. By partnering with MFIs to roll out public health initiatives, businesses can mitigate the impact of the pandemic in their supply chain in a cost-effective way.
Leveraging BRAC’s last-mile network and guided by local public health recommendations, we have enlisted and trained our frontline microfinance staff to spread messages on preventing COVID-19 through hand hygiene and social distancing and distribute supplies like soap and sanitizers in client communities. A similar approach proved crucial in the aftermath of the Ebola outbreak. Because BRAC’s frontline staff continued to engage with clients and connected them to lifesaving information and services, borrowers were able to bounce back more quickly after the crisis.
Partnering to invest in the future
It is still unclear exactly how the pandemic will unfold in the Global South and how long its effects will last. But in its aftermath, MFIs will play an important role in financing individual families and reviving local economies. As we have seen after past crises, there will be increased demand for loans to inject in businesses, buy productive assets, and boost consumption in the hardest hit communities.
Stakeholders around the globe have made tremendous progress towards the SDGs, but now that progress is at risk, and those in poverty will be hit the hardest. But through partnership, we can amplify our impact now. As MFIs navigate the uncertainties of COVID-19, injecting cash into client hands, fostering relationships with clients, and promoting public health are critical investments in local economies and communities. MFIs should work in tandem with businesses and other partners to make these investments. Together, we can amplify our impact to boost economic growth and community resilience.
Lewis Temple is Chief Executive Officer for BRAC UK.
This Earth Day, we focus on the impact projects like WE SOLVE have had on both the planet and people living in poverty.
BY CHRIS LYNE
In this age of lockdowns and social distancing, it is easy to focus on the terrible impact COVID-19 is having on people. Development organizations and practitioners the world over are grappling with the challenge of creating opportunities and providing services for vulnerable communities without being able to leave their own home, let alone conduct field visits. However, in spite of this, it is vital that we focus on the progress we have made pre-COVID-19 and will continue to make in the future.
Today is Earth Day, an international celebration created to drive transformative change for people and the planet. A unique project in rural Tanzania has been doing just that.
That project is WE SOLVE, which stands for Women Entrepreneurship through the Solar Value chain for Economic development in Tanzania. WE SOLVE has been tackling the twin problems of limited employment and economic opportunities for women in rural Tanzania as well as limited access to clean energy.
It involves a unique global partnership between BRAC, Solar Sister, a nonprofit that trains and supports women to deliver clean energy to rural African communities, and Signify, a global company offering high quality, reliable, and safe lighting products.
The project has a simple yet effective methodology: Solar Sister recruits women entrepreneurs to sell clean energy products to their own and neighboring communities. Signify is, among other providers, ensuring that Solar Sister entrepreneurs have high-quality, energy-efficient, reliable, and safe lighting to sell. They then use BRAC’s extensive microfinance network of over 200,000 clients as a customer base to sell the solar products. BRAC also supports clients with access to credit via a solar loan product to make the purchase more affordable if they do not have available cash.
The project, which started in 2018, has been funded for 4 years by Danida, Denmark’s development cooperation, and the Signify Foundation. The pilot phase of the project targeted the Arusha region, which is home to Tanzania’s nomadic Maasai and other communities. Many people here are ‘off grid’ and face life without light as soon as the sun sets, meaning that children cannot play or study and families are often dependent on fuel-powered resources to do their daily chores.
At its halfway point, the project has achieved remarkable success. BRAC recently conducted an annual survey report to explore its impact on the incomes and life chances of households in rural Arusha, comparing the baseline survey at the start of 2019 with data collected at the end of the year. The results are extremely encouraging.
Households spent on average 68% less on their energy per year because they used renewable solar lighting products instead of kerosene lamps, which are both expensive to run ($140 per year on average) and have damaging health impacts. The number of households reporting health issues due to the kerosene lamps more than halved with only 16% reporting relevant health problems.
The use of solar lights also had other benefits, with 64% of parents reporting improvements in children’s academic performance, mostly due to solar lights making light available for longer so children could complete their homework at night.
While gathering data for the annual survey, we spoke in detail to a number of clients to learn more about their stories. Elizabeth was one such person. She is a banana trader from Tengeru, a small market-town located in the foothills of Mount Meru. She took out a loan to purchase a solar lamp from a Solar Sister entrepreneur in early 2019.
“Since my family started living in this house in 1998, we had never had electricity. We had been using various types of kerosene lamps to take care of our lighting needs. I am a widow with four children; two are grown up, and two are still in school. The solar light has been very useful to my children, who are still going to school. Before, they used a kerosene lamp for studying at night.
“My son was recently blessed with a baby. Since we still did not have electricity in our home, I gifted my daughter-in-law the light to help with the baby, especially at night. My whole family has really benefited from this light. Even now, although we have managed to get electricity, the light is still very useful to use as a torch outside, or when the power goes out, and also in our bathroom outside that has no light.”
Elizabeth has seen the many advantages of access to affordable clean energy: the women entrepreneurs selling the products are earning an income, and the planet is benefitting from an increase in the use of renewable energy products.
On this day of action for mother Earth, it’s more vital than ever that we celebrate our success and look forward to more progress for communities like Tengeru in the future.
Chris Lyne is Advocacy and Communications Manager at BRAC UK.
Discover how financial inclusion inspires economic resilience
Around 1.7 billion people worldwide do not have access to financial services, and the majority are women. Learn how BRAC’s inclusive financial services enable people to grow their assets, invest in small businesses, manage shocks, and build economic resilience.