Livelihood & Microfinance
More than 700 million people – one in 10 people in the world – live in extreme poverty on less than US$1.90 a day1. The impact of extreme poverty on children’s development is significant – malnutrition among young children from developing countries is about 2.5 times higher in the poorest families compared with the richest2.
The world’s poorest citizens – those furthest behind – lack the means to pull themselves forward. Even for the more enterprising, banks refuse to grant loans due to their lack of collateral or credit history, so they are unable to start and grow a small business.
The poor are often excluded from economic opportunities, and in particular, women are the most affected.
They are not paid as much as men and are often discriminated against. Gender norms often relegate women to household roles and exclude them from decision-making on household expenditure.
Economic empowerment helps people, including women, to break into their local markets and out of poverty. Whether they are farmers or entrepreneurs, approaches like microfinance and savings groups help parents do more for their children. In time, it can lift and transform an entire community.
1 World Bank and UNICEF “Ending Extreme Poverty: A Focus on Children”, October 2016
2 Morgan R. ed. 2016: The Global Child Poverty Challenge, Practical Action Publishing, Rugby, UK
Lack of Capital
Poor farmers are unable to afford essential agricultural inputs, like plant fertilisers and animal vaccines, to boost their productivity.
Lack of Education and Knowledge
The poor are often uneducated and lack the skills that can land them better paying jobs. Those who are farmers may also lack the necessary know-how to maintain or improve their yields.
Limited Job Opportunities
The job market in villages is small. This shrinks even further during the dry season when farms do not need workers. Often, the only way to get better jobs is to move to urban areas, but many who make the move, including children, end up being exploited instead.
Weak Institutions and Financial Infrastructure
Bigger markets nearer cities offer better prices for goods, but are too far away. Instead, the poor often rely on middlemen, who take a cut of their profits, or borrow instead from local money lenders with high interest rates.