Complementary Initiatives (CI) Graduation Programs

  • Despite significant contributions of UCT and CCT, specific graduation programmes are needed to break the cycle of poverty. CT programs do not generate livelihoods to sustain improved conditions beyond the duration of the program. Global experience suggests that CT programs have been more successful and sustainable, when they are combined with complementary, well-sequenced interventions on the uptake of education, health and nutrition services, and when there is additional livelihood support for the poor. There are four basic components of graduation strategy including incentive structure, labor activation, linkages to other social programmes and financial inclusion.
  • Graduation models are adopted in most of the developing and developed countries at different levels of development (middle income, low income) with country specific interventions. Some countries with large/successful graduation programmes include Brazil, Mexico, Nepal, Bangladesh, Rwanda, and India.
  • Based on international best practices, consultation with its development partners and technical input of reputed academia (LSE, Harvard and MIT) BISP developed a model namely BISP Graduation Model (BGM) which aims to provide a low-cost, high impact and sustainable solution for their possible exit from the poverty trap, sensitive to the local context. The Graduation program aspires to enable beneficiaries to earn income, through (a) self-employment; (b) wage employment; (c) Public Works Programs.
  • BISP Graduation Model (BGM) is based on the premise that (a) it would enable the cash grants recipients to eventually transform into income earning individuals through self-employment and/or wage employment with skills development and hand holding, and (b) protect the large numbers of vulnerable poor to fall again below BISP cash transfer threshold (currently 16.17 PMT score) and avoid becoming BISP beneficiaries again. In doing so, it would mainly focus on people around the poverty line who have the economic potential to graduate out of poverty in a short time frame.
  • The BGM will help to reduce income poverty among BISP beneficiaries and will help ultimately weaning off graduated households from the BISP unconditional cash grant program. Improving or creating income opportunities by developing self-employment and supply chains to the private sector through (a) comprehensive coaching, and (b) inclusive business approaches. This will include developing the productive asset based through provision of income generating grants and loans, creating employment opportunities through developing their managerial and technical and vocational skills, and creating supply chain and market linkages to companies and other consumers that would buy the products of the poor.
  • The BGM is a model which combines elements of three distinct approaches, social protection, livelihoods development, and financial inclusion and draws on the most relevant aspects of these to deliver results by combining support for immediate needs with longer-term human capital and asset investments to move households out of extreme poverty and into sustainable livelihoods. BGM is structured around the sequencing of the core building blocks of targeting, consumption support, skills enhancement, asset transfer, saving and microfinance, with the objective to graduate out of extreme poverty and into sustainable livelihoods.
  • BGM is based on five core elements including i) Area Specific; to harvest local potential and reap the benefits of local market; ii) Beneficiary Specific; to accommodate poor and uneducated BISP beneficiaries; iii) Simple in Implementation, to ensure that BISP can implement it using its internal resources; iv) builds on BISP’s core competencies; that is, takes advantage of its cash payments mechanisms in place; and v) Scalable; to ensure that the largest number of beneficiaries, who have the potential to graduate, are given the opportunity to do so.
  • The BGM graduation also contributes to SDG Goal 8 of Decent Work and Economic Growth which promotes sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
  • The Graduation model was presented before the BISP Board. With the guidance of ADB, the BISP Board approved the Concept Note of Graduation Programme, including Direct Cash Transfer model, and Business Incubation for Self Employment (BISE) with NRSP as the implementing partner in its 29th meeting held on January 29, 2018.


  • Under the Business Incubation And Self Employment (BISE model) of graduation, a total of 100,000 households will be targeted, out of which 65,000 will be offered. It is expected that 35,000 BISE beneficiaries will graduate out poverty and the UCT payment.
  • The beneficiary must be competent to do self-employment and show her/his willingness to be part of the graduation program.
  • The Monitoring, Evaluation and Assessments will be done by BISP HQs and tehsil offices, on a periodic basis.
  • A Micro Investment Plan (MIP) for each selected household will be prepared to determine which type of investment is most appropriate for graduation. Investment may be in the form of one or multiple interventions as identified in the MIP. The program will be implemented for BISP by an Implementing Partner.
  • The key features of the BISE component of Graduation:
  • Profiling targeted households on their potential for self-employment.
  • Agreement by the BISP beneficiary that UCT will continue for only 1-2 years to provide protection against risks.
  • Giving specific technical skill trainings and business development support to selected programme beneficiaries.
  • Transfer of assets to start economic activities;
  • Providing income generating grants (working capital) to help the poor set up their business.
  • The working capital grants are endorsed with a mandatory 2 year saving scheme and with enrolling for 2 years in health insurance (or other relevant scheme insuring the business against risk such as fire, steeling, etc) insurance
  • Support services through linkages to existing microfinance programs (for inputs), and markets and value chains (for sales).
  • A Community Investment Fund (CIF) is the part of the Project Implementation with a seed capital grant to be used as a credit revolving fund managed through Community Institutions (CIs)/ BISP Beneficiary Committee (BBC).
  • Inclusive Business (IB) development is also a component of BISE, for income generation through linking up the poor to the value chains of at least 3 larger companies.
  • The UCT payment will be discontinued after one year.
  • If the person fails to graduate, she will be re-entered in BISP UCT system after the expiry of the graduation agreement/contract.
  • For implementing the BI-SE component, the following 5 districts selected are: Bahawalpur from Punjab, Charsadda from KPK, Jacobabad from Sindh, and Nasirabad and Ketch from Balochistan. The choice of districts is based on 4 major criteria including (a) poverty, (b) socio-economic readiness of the proposed district to adopt the business incubation approach and start successful businesses; (c ) security/mobility situation of the district, (d) presence of major NGOs, and other factors. The district selection was done based on a transparent composite rating tool. One district per province was selected, except Balochistan.
  • Given the low current capacity of BISP in monitoring and evaluation, additional resources are needed to build capacity in BISP and to do third party impact assessment and validation. BISP management and Board agreed that the overall impact assessment work for the graduation program will be done by PPIF. The terms of reference for the impact assessment through PPIF have been developed, need to be adjusted to the reduced implementation framework, and a service contract with PPIF can be signed quickly.
  • Introduce the Inclusive Business (IB) development component for income generation through linking up the poor to the value chains of at least 3 larger companies. To escape poverty, the poor involved in Inclusive Business investments of such companies would get income higher than the market rate from those companies, along with other support services from these companies i.e. training, inputs and secure markets.


  • The DIRECT CASH with business coaching for start-ups (the DC) component is based on the premise that poor people can make economically rational investment decisions if they are provided some small and initial help with business development. Beneficiaries interested in this program will be asked to trade the monthly UCT payments they are entitled to, in exchange for receiving a one-time lump-sum payment.

The activities for implementing this program are as following:

  • BISP will pilot this approach by visiting approximately 30,000 beneficiaries in Faisalabad and Chakwal pilot districts and informing them of the new lump-sum graduation program. It is expected that approximately 6,000 beneficiaries will apply to take up the graduation program. 3000 beneficiaries will be provided cash grant. While other 300 will be treated as the control group for research.
  • The beneficiary selection will be selected by balloting.
  • From amongst the participating beneficiaries, approximately half will receive a graduation offer; this will mainly depend on the readiness of the business. The selection is based on the readiness of the small business to achieve sufficient income to graduate out of poverty.
  • Detailed selection criteria were prepared, and need to be further fine tuned and then endorsed by BISP management. This system also allows having control groups to measure the impact of the program.
  • The amounts of cash grants received will differ depending on the option the BISP beneficiary will chose to graduate out of poverty. She/he will receive either a) PKR 70,000 for voluntarily agreeing to give up UCT for 4 years; or (b) receive PKR 54,000 for voluntarily agreeing to give up UCT for 3 or 4 years, and signing the agreement.
  • As such forms of self-employment are more viable in urban areas, the implementation is targeted to urban and semi-urban areas.
  • One Third of the participants (1000) will be asked for business plan and will be monitored. One third will be asked for business plan. On third will only be provided cash with no requirements, for the research exercise.

 The costs for DC program will be financed from the remaining funds of the ADB project in support of BISP, which are about US$ 05 million.

  • The implementation progress will be assessed through monitoring visits by BISP’s tehsil officials, and in selected cases also by the business school. The implementation of this program will be closely monitored by the MIT/Harvard/LSE team, and the research and evaluation and implementation costs will be funded by the Gates Foundation, and BISP will only pay UCT in advance
  • After the completion of the designated suspension time (3-4 years), and in case the business is not successful due to external risks (e.g. natural disasters or major unforeseen urgent family expenses for health), or other relevant changing conditions outside of the business, the beneficiaries will be eligible for re-entry into BISP by undergoing a new survey similar to the NSER that can be completed at the tehsil office. If they are found to be under the PMT cut-off as assessed by the survey, which may be subjected to an independent check to be determined later, they will be eligible to re-enrol into BISP

 For implementing the DC component, Faisalabad and Chakwal from Punjab and Laki Marwat from KPK were selected.

  • Impact Assessment of the DC model will be done by a team from Harvard, LSE and MIT agreed to do on a separately financed basis (not paid by BISP).

 Scaling up: The evaluations results of the pilots will be used to scale up the programs gradually and implement additional graduation programs as proposed under the BGF. Scaling up and broadening will however depend on possible funding options. As BISP intends to develop into a comprehensive federal agency for livelihood promotion and social protection for the poor;, the preparation for scaling-up can start immediately and implementation could begin already in end 2018 and go through 2030.