Grant vs. credit plus approach to poverty reduction: An evaluation of BRAC’s experience with ultra poor

Abstract

Challenging the Frontiers of Poverty Reduction- Targeting the Ultra Poor (CFPR-TUP) program of BRAC implements two interventions for the ultra-poor: a grant-based support package for specially targeted ultra-poor (henceforth STUP support package), and credit plus grant support package for other (better off) targeted ultra-poor (henceforth OTUP support package). The target group of the OTUP support package is drawn from relatively well-off households than the STUP ones. Furthermore, the STUP support package is more expensive compared to the OTUP. An attempt has been made in this paper to evaluate these alternative approaches to poverty alleviation. Using non-experimental evaluation design, it was observed that both the STUP and OTUP support packages increase self-employment, total labour supply, per capita income, consumption of high-value food products, and productive asset-base of the ultra-poor. There is also evidence that these supports lead to some additional non-food improvements such as increased clothing and reduction in domestic violence against women.