Case study

Microfinance Engagements of the 'Graduated' TUP Members

What drives ultra-poor womens' engagement in microfinance?
Download 25 pages

This study assesses the developmental impact on women beneficiaries of Bangladesh Rural Advancement Committee's (BRAC) microfinance program, 'Challenging the Frontiers of Poverty Reduction/ Targeting the Ultra Poor' (CFPR/TUP) in 2002, the details of which are as under:

  • Aim: to assist the poorest segment of the population to build up an asset base that would enable them to participate in microfinance activities.
  • Phases:
    • A 'grant phase' of 18 months;
    • A 'graduation phase', where the ultra poor women form groups and are offered small amounts of credit.


    The study explores:

    • Ultra poor women's engagement in microcredit;
    • The quality of participation in credit, including loan usage and repayment management;
    • Informal market participation;
    • Semi-formal savings.


    The study finds that:

    • Microfinance for the poorest may take longer to achieve sustainability;
    • Income diversification is important for sustained microfinance engagement;
    • Shocks can cause discomfort of repayment and dropout from credit activity;
    • Engagement of ultra-poor households in microfinance increases with improved quality of living;
    • Flexibility in deposit and withdrawal are more important issues than earning interest for the micro-savers;
    • Their engagement in semi-formal microfinance does not reduce involvement in informal financial markets;
    • Along with credit, accumulating savings is very important to ultra-poor households.


    The paper concludes by recommending:

    • A recognition of the importance of savings;
    • Innovations in the area of appropriate savings products.

About this Publication

By Sulaiman, M., Matin, I., Siddiquee, M., Barua, P., Alarakhaia, S. & Iyer, V.
Published
Collection