Targeting the Hard-Core Poor – An Impact Evaluation

This study evaluates the impact of an asset transfer and training program on the economic and social well-being of ultra-poor households. 

Few development programs have proven effective at helping the poorest of the poor, a failure which highlights the need for interventions that can successfully improve the welfare of this vulnerable population. The difficulty in effectively identifying and providing assistance to the poorest of the poor, who are often underserved by public and private development programs, poses a challenge for development practitioners and policy makers.

Bandhan’s program is part of a worldwide pilot of ultra-poor initiatives led by the Consultative Group to Assist the Poor and funded by the Ford Foundation. Bandhan aimed to help ultra-poor households gain a steady source of income with the hopes that a new source of income would reduce households’ vulnerability, boost their well-being and put them in a position to access standard microfinance services. Conducted by the Centre for Microfinance in partnership with academic researchers based in the United States and India, the study evaluated the impact of the asset transfers and training on the economic and social well-being of ultra-poor households.
The study was conducted in Murshidabad district of West Bengal. Ultra-poor households were identified using Participatory Rural Appraisals. Bandhan developed the identification criteria for sample participants in close consultation with BRAC. Households were required to meet the following criteria:
1) Each household had to have a healthy female member (as a major focus of this study was on improving the financial situation of female members of the ultra-poor households)
2) The household could not be affiliated with any other microfinance organisation
3) The household’s assets had to be lie certain income and asset cut-off
After identifying 991 “ultra-poor” individuals in 45 villages in the district, 512 potential beneficiaries were randomly selected into the treatment group and were offered an asset transfer livelihood training. The participants were not allowed to sell their assets and the program was rigorously monitored by Bandhan. Participants also received a fixed weekly allowance depending on the type of the asset that was transferred to them. Once some participants received graduation training and joined regular microfinance programs, researchers tracked changes in their well-being along key dimensions by conducting a second endline survey.

Key Findings

One of the most significant findings of the study is that the program substantially increased the food consumption of participant households relative to the randomly selected control group. Due to the difficulty of measuring income for such households, measuring growth in consumption provides a useful measure of economic well-being. The study finds that a number of additional benefits accrue to members of households randomly selected to participate in the program. In particular, they report being happier and in better health. In spite of these latter results, the study did not detect program effects in terms of more objective measures of physical health, but such effects may take time to become apparent. The program was also successful in improving key dimensions of household well-being and graduating households into the regular microfinance program. At the end of 18 months, the majority of the participants in the treatment group joined one of Bandhan’s microfinance groups and had taken a loan.


Similar programs can help improve the resilience of ultra poor and low-income households, and establish stable sources of income for them. Participatory processes can play a critical role in identifying households that are most vulnerable. The initial success of Bandhan’s program has led them to scale this up very quickly in other districts of West Bengal. Moreover, variations of such livelihood generation and graduation programs coupled with access to microfinance are being implemented by the Consultative Group to Assist the Poor (CGAP), and other stakeholders. 

Thematic Area

Financial Well-being and Social Protection

Project Leads

Abhijit Banerjee, Esther Duflo, Raghabendra Chattopadhyay, Jeremy Shapiro


West Bengal