According to UNHCR, the graduation approach is “a sequenced, multi-sector intervention that supports the poorest and most vulnerable households to achieve sustained income and move out of extreme poverty within a specified period. Graduation programs provide a comprehensive package that includes consumption assistance to meet basic needs, skills training, seed capital or employment opportunities to jump-start an economic activity, financial education and access to savings, and mentoring to build confidence and reinforce skills” (See: UNHCR Graduation Approach).
A graduation approach is unique from other financing methods in that it explicitly targets the poorest households and provides them with resources to “graduate” into eventually developing a small to medium-sized enterprise.
The approach can be summarized by the following steps:
Address immediate consumption needs. The poorest households are often consumed with day-to-day survival, therefore eliminating the possibility of saving, investing or dedicating time to building new skills.
Once basic needs are met, aid providers can begin to provide training relating to saving money, transferring assets (such as livestock), life skills, and technology.
Foundational training, along with consistent counseling, opens up opportunities to consult other financial methods and institutions to continue to improve a household’s livelihood.