The Livelihood Pathways for the Poorest project, implemented in Gaya District, Bihar, India, with support from the Rockefeller Foundation, aimed to demonstrate a model that could help the ultra-poor escape poverty through the provision of integrated financial, livelihood and risk management services. Savings mobilization formed the core of the project and anchored crucial activities, such as linkages with formal financial institutions and the introduction of income generating activities.
Grappling with poverty at its harshest these clients are willing to set aside a tiny portion of an already low and unstable income for future consumption. What made them willing to save, what determined the amount they saved and what drove this need to save? Do they save in lump-sums and how regularly? How likely are they to save? These and more questions drove the quest to decode the savings behavior of the ultra-poor in Gaya.
The poor need access to financial services to create diversified and reliable sources of livelihood, which help them move out of poverty. Microfinance, which provides essential financial services to the poor around the world, however, has found it difficult to reach out to the poorest, who live on less than US $1.25 per day. The Livelihood Pathways for the Poorest project, which is jointly implemented in Gaya District, Bihar, India, by the Grameen Foundation and the Livelihood School (part of BASIX group of companies), aimed to demonstrate a model that could potentially fill this gap in service provision to the ultra-poor. The project employed a holistic approach to address the needs of the ultra-poor by providing integrated financial, livelihood development and risk management services. It used action research to test the hypothesis that it could be financially viable for a microfinance institution to cater to the economic needs of the very poor along with their other target clients. The project also sought to determine that even the poorest could effectively use microfinance services (savings and loans) if they are provided in combination with additional services, such as insurance, livelihood development and mentoring, particularly if the products are structured to align with clients' livelihood patterns.