Despite being one of the world’s fastest growing economies, India remains home to a large “below the poverty line” population: over 233 million people. Poverty reduction is a national priority, but social welfare programs have had very limited outreach to these “below the poverty line” households.

Bandhan Konnagar, an NGO based in West Bengal in eastern India, was founded in 2001 as an auxiliary of Bandhan Microfinance Institution (Bandhan MFI), and ventured into development programs in 2007. Between 2007-2009, it implemented the Targeting the Hard Core Poor (THP) pilot with 300 female participants for 24 months in Murshidabad, one of the poorest districts of West Bengal. The nature and prevalence of extreme poverty in West Bengal is similar to that of Bangladesh, as the two adjacent regions share a common history and social culture. Several of Bandhan’s senior staff members had previously worked on the operational design of BRAC’s Targeting the Ultra Poor (or TUP) program in Bangladesh, the program that was the precursor of the Graduation Approach. These staffers saw an opportunity to draw on the lessons they had learned first-hand, and pilot test one of BRAC’s best known programs in India.

The THP program is a grant rather than credit-based targeted approach that offers time-bound support to address multiple issues associated with severe income poverty. For the THP pilot, Bandhan Konnagar’s vision was to enable the poorest to “graduate” into financial services after their urgent consumption needs had been met and they had a sustainable livelihood, rather than leading with financial services as the self-help group model does. Three key lessons emerged from the THP pilot:

  1. Households without able-bodied male members are the most vulnerable.
  2. Women who engage in petty trading generate income more quickly and consolidate their enterprises faster than do women whose primary economic activity is agricultural.
  3. Success in the context of a THP household has a holistic and qualitative nature that a single graduation indicator, such as a household beginning to use financial services, cannot accurately capture.

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