Ultra Poor Graduation Pilot in Ghana
Can an intensive package of support lift the ultra poor out of extreme poverty to a more stable state? Graduation programs provide ultra-poor beneficiaries with a holistic set of services including: consumption support, new livelihoods (such as chickens or goats) provided as an asset transfer along with training on management of the assets, access to savings, and coaching visits over a 24-month period. IPA is conducting randomized evaluations of CGAP and Ford Foundation-sponsored graduation pilots in seven countries: India, Pakistan, Honduras, Peru, Ethiopia, Yemen, and Ghana.
Households well below the poverty-line face an interrelated set of challenges, each of which colludes to keep families in extreme poverty. These families are food insecure, do not have access to financial services, have few assets, savings, and inadequate access to healthcare, and often cannot afford education for children or need children to work. Without many opportunities or tools with which to change their situation, these households are vulnerable to shocks, such as bad harvests, and often dependent on charitable or government services for basic food support during lean seasons.
Graduating from Ultra Poverty (GUP) uses the Ultra Poor Graduation model, developed by BRAC as part of its Targeting the Ultra Poor Program in Bangladesh, to confront extreme poverty by offering a holistic set of services. The model addresses the varied needs of households in extreme poverty by providinga sequenced set of services, including consumption support, productive asset transfer, livelihood training, savings services, and healthcare. This approach is based on the premise that beneficiaries require intensive support, beyond financial services, to make a sustainable change out of extreme poverty. In Ghana, the GUP evaluation provides an opportunity to measure the impact of the savings component of this program.
Making weekly visits and providing a holistic bundle of services is costly. Evidence suggests that poor households, who are resource constrained, may be able to improve their economic welfare with improved financial products like savings accounts. The Savings Out of Ultra Poverty (SOUP) program in northern Ghana provides households with the opportunity to save money in a secure account through a weekly Susu collection program to build capital for future expenses, providing an opportunity to learn whether savings alone can make a difference for households in extreme poverty.
By comparing the impact of the GUP and SOUP interventions, this study will help determine the impact of savings alone as well as savings when combined with a holistic package of services and which approach is more cost effective in improving household economic and social outcomes in the short and medium term.
In Ghana, the GUP and SOUP programs are being implemented in 155 communities in the districts of Tamale Metro, East Mamprusi, and Bulsa in the Northern and Upper East Regions. Presbyterian Agricultural Services (PAS), a local organization with experience delivering a wide range of services relating to agriculture, health, and saving, is implementing both programs with the support of IPA and in partnership with local rural banks. IPA is also conducting the impact evaluation.
The GUP and SOUP programs serve women in the poorest households of selected communities. At the time of the baseline 84 percent of these women were illiterate, 18 percent had a household member with access to some sort of paid work, 66 percent lived in houses with mud or sand flooring, 93 percent had houses with thatched roofs and nearly all households relied primarily on subsistence farming.
Households in selected communities were identified using a Participatory Wealth Ranking (PWR) process where villagers were asked to collectively rank the economic status of their community members. Field officers confirmed the poverty status of eligible families and households. Communities were then randomly assigned to receive GUP, SOUP or to serve as comparison group with no intervention. Half of the eligible GUP households were also randomly assigned to receive weekly Susu collection as part of the package of services, and half of the SOUP households received a 50 percent match on any savings deposits made. GUP and SOUP household receiving savings services are visited weekly by PAS field agents like “Susu” or “small small moneys” agents who collect savings for safe keeping. PAS field agents deposit savings in household bank accounts and do not charge additional fees. Transactions are recorded for each household in a passbook provided by the bank. Clients can withdraw money at any time by visiting a local bank branch.
GUP households receive consumption support during the lean season, an asset to jump-start a new entrepreneurial venture, membership to the National Health Insurance Scheme and weekly training with support from field staff throughout the 2-year program. Households are also supported by community support committees, connected to health services, and receive assistance in opening an account a local bank.
Households selected to receive the SOUP program receive savings accounts and weekly Susu collection services only – without all of the other components of the original Ultra Poor Graduation program. Half of the SOUP participants also receive a 50 percent match of all weekly savings deposits up to GHS 1.50 ($0.88 US) per week. There is no minimum or maximum to the amount that clients can save each week.
By disaggregating the savings component from the rest of GUP program both by randomly offering savings accounts with the original model and creating a savings-only program, researchers will be able to examine the overall importance of savings accounts in assisting ultra poor households. Furthermore, the matched savings intervention will allow analysis of the incentives on participant savings. Specifically, researchers will be able to determine whether households are already saving the maximum amount possible, or if incentivizing savings can further increase deposits.
For additional information on the Ultra Poor Graduation Pilots, click here.