Grant Based Approach to Poverty Reduction : Evidence from Bangladesh

A large scale programme that provides grants along with background support services was implemented by BRAC in an effort to alleviate extreme poverty using a grant-based approach known as Challenging the Frontiers of Poverty Reduction (CFPR). At the beginning of the programme, the participants are provided with income generating assets and training on various issues over a course of two years so that they may graduate into mainstream poverty. The objective of this study is to see the impacts of the CFPR programme two years after the intervention. We have analysed a two round panel dataset from 2007 (baseline) and 2009 (end-line) using the propensity score matching methodology. Results show that not only did the level of income and savings go up amongst the participants, employments dynamics changed from dead end jobs such as working as housemaids and day labourers to more entrepreneurial activities. Furthermore, results also show that the level of food security had also improved. The participants were able to expand their asset base beyond what was provided by the programme initially. Though public expenditures for the poor are not insignificant, often suffer from substantial leakages either through corruption or mismanagement, rendering them toothless. This paper finds that the CFPR approach as implemented by BRAC is clearly an effective strategy to fight ultra poverty in a sustainable manner which can be replicable in other developing country