A Randomized Controlled Trial of Program Duration, Small Cash Transfers,
and Business Coaching within a Graduation-type Intervention in the
Philippines

Introduction

Poverty remains one of the most pressing global challenges, affecting 10% of the world’s population (World Bank, 2018). The Graduation Approach addresses this through a holistic approach combining multiple interventions, believing comprehensive strategies outperform isolated ones (Consultative Group to Assist the Poor, 2014). Typically implemented over two years, the program ensures participants have sufficient time and pace to absorb and apply knowledge, leading to transformative outcomes.

Research shows this approach proves most effective when tailored to extreme poor communities’ specific contexts, like adjusting consumption support or program duration (Hashemi & De Montesquiou, 2011). Banerjee et al. (2015) evaluated this approach across six countries, finding sustained improvements on key outcomes including income, assets, food security, physical and mental well-being twelve months post-intervention for treatment groups across all study locations. Similarly, J-PAL ‘s evaluation of 20 studies confirmed the approach’s lasting economic benefits, with income and consumption gains persisting ten years post-intervention (21-38% income, 11-22% consumption) and economic returns exceeding program costs within three years (Abdul Latif Jameel Poverty Action Lab, 2023).

In the Philippines, the Department of Labor and Employment partnered with BRAC and the Asian Development Bank to pilot the Graduation Approach in Western Visayas (2018), providing in-kind asset transfers, market linkages, coaching, and skills training based on intervention assignment. Results showed statistically significant increases in food security, financial management, and life skills, with 7.8% higher consumption despite lacking income effects. (Schelzig & Jilani, 2020; Innovations for Poverty Action, 2022).

While the Graduation approach has proven effective, J-PAL reports that program success relies on substantial asset transfers, making it expensive and logistically complex to implement over the typical two-year duration (Abdul Latif Jameel Poverty Action Lab, 2023). Village Enterprise developed a lower-cost alternative condensed to a year with smaller group transfers of USD 145 (USD 45 per person), training, and business coaching. Sedlmayr et al. (2020) found this increased household consumption (4%), productive cash inflows (10%), and improved psychological and social well-being.

International Care Ministries (ICM) tests cost-effective Graduation approach adaptations through randomized controlled trials (RCT). Unlike traditional Graduation programs, ICM’s core program, Transform, runs for just four months yet includes a key Graduation component, training, through weekly health and livelihood lessons for extreme poor households.

A 2015 RCT with Innovations for Poverty Action (IPA) revealed significant income improvements from Transform’s spiritual component (Bryan et al., 2020). However, a later RCT in 2022 testing the Transform program with USD 20 small grants did not find statistically significant effects on income and consumption despite showing significant savings effects.

Following these previous RCTs, this study focuses on program duration as a key feature of the Graduation approach. The RCT examines whether extending Transform from its standard 4 months to either 12 or 24 months improves households’ economic outcomes. The extended program incorporates business coaching and cash grants (individual and community) based on the 2022 RCT recommendations.

Building on existing Graduation studies, this adaptation tests varied duration approaches alongside less frequent training (monthly rather than weekly), lighter-touch business coaching intensity (focused on business plan implementation), and smaller grant amounts (up to USD 40 per person). Through systematically varying design elements, this study investigates whether programs like Transform can deliver more cost-effective poverty alleviation strategies than conventional Graduation models, and whether the extended variations with small grants and coaching produce comparable economic improvements.

This RCT was funded by the Global Innovation Fund.