Targeting the Poorest in Microfinance: Poverty Outreach of BDP Ultra Poor Programme Issue 13

Despite the general consensus that microfinance does not reach the poorest; ecent evidence suggests that nearly 15% of microfinance clients in Bangladesh are among the poorest. It is from the realization that even within the existing microfinance membership of BRAC, there is a significant percentage of the poorest; the CFPR-TUP programme has included a special focus on this segment of the poor what it calls the ‘BDP ultra poor’. So, BDP ultra poor are those struggling members of existing village organization (VO) or very poor households in a village who with some additional support can more fully participate and benefit from microfinance services. This study attempts to assess the targeting effectiveness of the BDP ultra poor programme by measuring relative poverty of BDP ultra poor. A total of 1,339 households were surveyed from 30 area offices consisting of BDP ultra poor, VO members and non-VO members.

Findings show that 46% of BDP ultra poor households belong to the poorest quartile and most of the remaining BDP ultra poor households belong to moderate poor quartile that suggests the programme is being able to concentrate on the target population. It was also found that the current focus on BDP ultra poor targeting is on the poorer VO members since majority of BDP ultra poor households was selected from existing BRAC microfinance VOs. To improve targeting effectiveness of BDP ultra poor package further, the focus will have to be on the poorest households outside the VOs most of whom have never participated in any microfinance programmes and possessed extremely low poverty score.

Related information

  • Writer Name: Proloy Barua, Munshi Sulaiman
  • Published Date: Tuesday, 08 August 2006
  • Country: Bangladesh