Targeting the Poorest in Microfinance: Poverty Outreach of BDP Ultra Poor Programme

This study attempts to assess the targeting effectiveness of the 'BDP ultra poor programme' by measuring the relative poverty of 'BDP ultra poor'. The study defines BDP ultra poor as 'those struggling members of existing village organizations (VO) or very poor households in a village, who with some additional support, can more fully participate and benefit from microfinance services'. The study:

• Surveyed a total of 1,339 households from 30 area offices consisting of BDP ultra poor, VO members and non-VO members;
• Used the 'principal component analysis' (PCA) method to measure relative poverty status of the beneficiaries of BDP ultra poor programme.

The study found that:

• 46% of BDP ultra poor households belong to the poorest quartile and most of the remaining BDP ultra poor households belong to the moderately poor quartile;
• The program is being able to concentrate on the target population;
• The program is reaching areas that government programs for benefiting the poor have not yet reached;
• The current focus on BDP ultra poor targeting is on the poorer VO members since the majority of BDP ultra poor households was selected from existing BRAC microfinance VOs.

To improve targeting effectiveness of the 'BDP ultra poor' package further, the authors recommend a focus on the poorest households outside the VOs most of whom have never participated in any microfinance programs and possess an extremely low poverty score.