Reaching the poorest : lessons from the graduation model

Microfinance is about extending financial access to poor and excluded people. However, apart from a few notable exceptions, microfinance has not typically reached extremely poor people those at the lowest level of the economic ladder. The majority of the world's estimated 150 million microcredit clients are thought to live just below and, more often, just above the poverty line. This achievement is not negligible since, for most of these clients, the only other options are informal sources of finance that are often more costly and less reliable. This paper highlights the lessons learned from the graduation program first by describing how the model works and how various partner organizations implement it in the field. A subsequent section distills the early findings and is followed by a section on costs. The final section takes stock of the learning to date, including key constraints and outstanding questions.