Targeting the poorest in microfinance: poverty outreach of BDP Ultra Poor Programme

In 2001 the BDP microfinance ultra-poor programme was established in rural Bangladesh. To attract and sustain the participation of the ultra-poor, this experimental programme provides credit and enterprise training, as well as services like skill-building and basic healthcare and medicines.

This study evaluates the targeting effectiveness of the programme by measuring the poverty of both programme participants and non-participants. It is based on a survey of 1,339 households from 30 area offices, consisting of BDP ultra poor, village organisation (VO) members and non-VO members.

The outcomes of the study suggest that the programme is effectively reaching the target population. However, it may not be reaching or meeting the needs of the very poorest: those who were participating in the microfinance programme at the time of survey were less poor compared to those who had dropped out, while those who had never participated in the programme were the poorest.

The paper concludes that, in order to better target the very poor, the programme will have to focus on the poorest households outside the village organisations, most of whom have never participated in any microfinance programmes. This group of households, however, is significantly poorer, and therefore they may need a package designed specifically to meet their needs.