One of the most vulnerable segments of the population is the extreme poor in Peru’s isolated rural areas. So when the Peruvian government set out to create a national program to address the issue of rural poverty, its leaders took inspiration from previous successful programs. Two programs operating in Peru at the time offered promising paths to take. The “Graduation Approach” had originally been developed by BRAC in Bangladesh and then adapted by CGAP and the Ford Foundation at 10 sites in eight countries from 2006 – 2015, including in Peru. The other relevant model was a recently created agricultural program called Mi Chacra Productiva, or My Productive Farm. Both programs deployed diverse strategies to address extreme poverty.

The essential elements of the Graduation Approach are consumption support (that is, direct food relief or money with which to buy sufficient food), livelihood skills training, a transfer of productive assets, mobilization of savings, and life skills coaching. My Productive Farm focused on developing agricultural production skills and improving food security by providing a standard package of assets and training for all beneficiaries.

Based on these and other programs, the Peruvian government designed Mi Chacra Emprendedora, or My Entrepreneurial Farm, which offered a flexible menu of assets and technical training. Following successful testing in 2012, My Entrepreneurial Farm was launched in 2013 as Haku Wiñay, a nationwide program to promote social and economic inclusion of extremely poor rural families. Haku Wiñay means “We are going to grow” in the Andean Quechua language; in jungle regions the program is called Noa Jayatai, which means “We are going to grow” in the Shipibo language. (This case study will refer to the program as Haku Wiñay.)

The central insight guiding the Graduation Approach in Peru is a recognition that extreme poverty requires more than cash transfers. A decade before creating Haku Wiñay, Peru began distributing conditional cash transfers (CCTs) to the extreme poor through the Juntos (Spanish for “Together”) program. Juntos delivers a stipend of about $70 every two months to poor mothers in rural areas to help them buy more food to improve family health and well-being. In return, the women are required to keep their children in school and take them to regular health check-ups. But policymakers recognized that the transfers alone were insufficient to spark the significant changes ultimately necessary to address extreme poverty.

Peruvian policymakers recognized the need for the additional skills-building services that a Graduation Approach provides. Poverty experts in Peru (and elsewhere) are generally realistic about the capacity of any one intervention to “graduate” anyone from poverty permanently. Thee power of the Graduation Approach as one that gives participants hope and a sense that they are embarking on a different, more purposeful way of life.

This case study of the Graduation Approach in Peru provides insights into the success of the model and recommendations on how programs can be scaled up.

Download the full report here.