Living on Less Than $1.25 a Day

The $1.25 per person per day threshold for extreme poverty is a standard adopted by the World Bank and other international organizations to reflect the minimum consumption and income level needed to meet a person's basic needs. That means that people who fall under that poverty line—that's 1/6 of the world’s population, or 1.4 billion people—lack the ability to fulfill basic needs, whether it means eating only one bowl of rice a day or forgoing health care when it’s needed most.

The Trickle Up program is designed specifically to reach and provide a pathway out of poverty for the extreme poor: those who fall well below the threshold for traditional microfinance services. We use a rigorous participant selection process to ensure that our participants are people who live under less than $1.25 per day. While microcredit is reaching millions of the poor every year, the ultra-poor remain virtually invisible. If they are lucky, they might have access to "safety nets" like food aid. But this kind of safety net is just that: a band aid, a survival mechanism rather than a means of addressing the roots of poverty.

One of the most important factors distinguishing the ultra-poor from other poor people is that it's simply impossible for the poorest to build a buffer they can draw on to meet day-to-day needs and ride out especially difficult times. Even families living at $2 a day can usually put aside a little savings. But at less than $1.25 a day, nearly all of a family's income (80%) is spent on food. Without a buffer, a household is constantly at the mercy of circumstances—never able to move forward and, even worse, chronically pushed further back into poverty by "shocks" such as an illness or a bad harvest. Unlike moderately poor and low-income households living on $2 per day who may be in the financial position to take on the risk of a microloan, the extreme poor cannot assume that risk. The burden of paying back even the most modest microloan is an impossible one to bear when chronic malnutrition, poor health, illiteracy, and economic insecurity are a way of life. Additionally, most people living in extreme levels of poverty do not qualify for microloans.

Trickle Up is one of the leading international poverty alleviation organizations working exclusively to serve the ultra-poor. Our programs are specifically tailored to meet the unique needs of women and families living at extreme levels of poverty. By providing a small bit of capital, known as the Trickle Up Spark Grant, and vital financial and social services, we help participants create opportunities that can break the vicious cycle of poverty, empowering the poorest to achieve a sustainable level of economic stability.

Consider the challenges the extreme poor typically face in their daily lives:

• They struggle to find the means to eat three meals a day.
  
  
• They live in isolated, rural villages, typically with populations of no more than 200-500 people, in areas lacking decent roads and safe transportation to towns and cities.
  
  
• They often have to migrate for 3-6 months every year, hundreds of miles away from their families to work as day laborers in sub-human conditions to survive what is called the "hungry season."
  
  
• They typically live in regions that are geographically unstable and endure drought, hurricanes, floods, and other natural disasters annually, conditions that erode or damage crops, drain resources, and make food, water and basic necessities harder to come by.
  
  
• 95% live in homes with dirt floors and roofs that fail to keep out the rain and other elements; homes often lack basic sanitary latrines.
  
  
• Many of their communities lack basic services such as public education and health care.

Working with the extreme poor is more time consuming and costly than working with other populations because their needs are so vast. For the extreme poor to begin the ladder toward greater economic security and think beyond the day-to-day, it is critical that they learn basic financial skills, learn how to save, gain greater financial stability through a diversity of income-generating activities, and develop the self-confidence they need to persevere and succeed. They often need a great deal of follow-up support in the initial stages of this process.

Through our local partner agencies, Trickle Up also links program participants to a wide range of services. Depending on the capacity of our partners, this may mean access to health services, basic sanitation and nutrition training, literacy training, registration for identity cards that allow them to access supplies at reduced rates, and legal registration of their groups so they can apply for grants or open bank accounts.

Trickle Up helps participants start sustainable livelihoods: diversifying income sources to reduce vulnerability, strengthening their income generating capacity, building social capital to be more pro-active in accessing goods and services, and building their assets in goods and savings to strengthen their security and independence. All of these steps are part of what is involved in moving and staying above the poverty line.