Graduating out of extreme poverty in Haiti

by Aude de Montesquiou : Wednesday, July 1, 2009

At the end of the pilot Fonkoze identified three absolute criteria to qualify for graduation, and several general criteria.

There is probably no need to convince any reader of this blog that microcredit can be useful for those with the stability and skills to operate a microenterprise. But what about the very poorest people? Last week I was in Haiti to review a pilot program CGAP and the Ford Foundation has started to see how a careful combination of safety nets, livelihoods activities, and financial services can create pathways out of extreme poverty. This sequencing, that we call the “graduation model” because the aim is to move people out of extreme poverty, is being tested in nine pilot sites.

“Chemen Lavi Miyo” –or “Pathway to a Better Life”–implemented by Fonkoze in Haiti is the furthest along with 95 percent of the women having graduated in early 2009–18 months after they began in the program. But how to measure what it takes to “graduate” out of poverty?

One-hundred fifty families in Boukan Kare, Twoudino, and Lagonav in Haiti participated in the pilot. Fonkoze selected only women-headed households with several children but none of them in school. Families had to be food insecure and often hungry; totally lack assets; and without access to health care to qualify for the program. The picture for the women initially selected was pretty grim.

Over the course of the 18-month pilot, women were provided with assets necessary for two of income-generating activities, materials to build tiny homes with sturdy roofs, and latrines. Fonkoze also provided small, short-term cash stipends to create some “breathing space” for new entrants in the program. In one location people were also directed to a free healthcare provider. Participants were trained how to make the best use of their asset, and most important, each member got weekly visits from Chemen Lavi Miyo staff to help boost their self-confidence.

At the end of the pilot Fonkoze identified three absolute criteria to qualify for graduation, and several general criteria. The absolute criteria considered whether members were healthy enough to work, whether the family had a viable roof over the house, and no malnourished children in the household, or malnourished children attending a feeding program. Additional criteria were also taken into consideration: households eating at least one cooked meal a day, owning an asset worth at least US$150, members engaging in at least two income-generating activities, making active use of their saving account, and, last but not least, being confident in the future.

The idea was to determine “success” as something achievable for the ultra-poor on the program. Although the “graduation indicators” used in Haiti are context-specific, they resonate with a set of concerns we are seeing in other sites across the globe. Graduating out of extreme poverty seems to mean achieving food security, stabilizing income, accessing healthcare, and having a plan for your-own future.

TAGS: Fonkoze, graduation models, Graduation program, Haiti, Pathway to a Better Life, poverty in Haiti

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3 Comments

July 11th, 2009 at 4:37 am, V.Rengarajan ()

Haiti experiments show positive trend in the process of poverty reduction
Graduation indicators differ even from household to household depending on their need and profile. What is important here is ‘sequencing the inputs ‘ in the case of ‘ultra poor’. Here food security and health care are taken care of first for enhancing the capability and micro credit to come in the last.
In many of MF programme ‘putting the last ( micro credit) first’ only without provision for capability building of the ultra poor, derail achieving the noble objectives of MF for poverty reduction.
In Haiti experiments, I feel that in the process of graduation, the other component of Micro finance, namely ‘Micro insurance’ has also a role to play for ensuring sustainability

October 8th, 2009 at 2:20 pm, Anne Hastings ()

In response to the concern about microinsurance, Fonkoze in Haiti — along with its partner, AIC — is a leader in the provision of microinsurance. We were the first on the market with life/credit insurance and are working now on introducing catastrophic insurance. But our microinsurance products cover the balance of the loan and provide an indemnity of $125. For the graduation program, there is no loan involved until they graduate and receive their first small loan of $25.
For our scale-up, we have worked into the budget an “emergency fund” to take care of immediate, unforeseen problems in the lives of our clients. Usually this is the necessity of paying for a funeral for one of the family members. But it could be anything — like the need to transport a person or animal someplace for emergency care.
I do agree, however, that insurance might be a preferred solution. In that sense, the client would begin to learn about the necessity of protection against risk. So I appreciate the idea!