The term ultra-poor was coined in 1986 by Michael Lipton of the University of Sussex. He defined the ultra-poor as “a group of people who eat below 80% of their energy requirements despite spending at least 80% of income on food” Ultra-poor households are only able to afford fewer than two meals every day. Malnutrition makes illnesses worse, which further depletes resources and necessitates borrowing from predatory lenders. 

Poor households may struggle to make ends meet, but they still have some access to basic necessities and may be able to earn a living through informal employment or other means. Ultra-poor households, on the other hand, are often completely destitute and may lack the skills, resources, and social networks needed to improve their situation.

Ultra-poor households are stuck in a poverty trap which means that they are unable to increase their future earnings beyond their current earnings. And so, not only now, but future generations are also doomed to extreme poverty. 

Households in ultra-poverty have little or no assets, especially those of a non-durable kind, have few hopes for a better future, and are socially, economically, and geographically isolated. 

In a majority of cases, ultra-poor individuals live in remote rural areas, where they face significant barriers to accessing education, healthcare, and other essential services. They are also usually excluded from formal labor markets, leaving them to rely on subsistence agriculture, begging, or other forms of informal work. Any wage labor is highly erratic.

Many of the large-scale government livelihood programs and safety net programs that are aimed at the poor do not reach the most vulnerable and extremely poor people. Additionally, market-based solutions are frequently inaccessible to them.

Enabling the ultra-poor to break out of the poverty trap sustainably, requires multi-dimensional and carefully designed interventions, with the most promising approach being the Graduation Approach that the End Ultra Poverty program follows.