How Effective is a Big Push to the Small? Evidence from a Quasi-Experiment

SummaryThis paper investigates whether a big push to the extreme poor in terms of a one-off large grant enables them to participate in the microfinance program. The analysis uses data from a quasi-experiment on BRAC’s ultra poor program in Bangladesh. The results for the baseline and repeat survey data for the treatment and comparison groups show that such a big push does make a significant impact on graduation to the microfinance program. The results are robust to correction for self-selection bias. Social capital and awareness also play important role in their decision on NGO membership and borrowing.