According to the World Bank, more than one billion people today live on less than $1 per day. About 70% of those people are women, and almost half of the population of sub-Saharan Africa survives at that income level. We know that every 3.5 seconds, a child dies in the developing world from poverty-related circumstances.

While on the surface poverty is often defined as a lack of income or assets, in the day-to-day lives of the very poor, poverty becomes a network of disadvantages, each one exacerbating the others. The result is generation after generation of people who lack access to education, health care, adequate housing, proper sanitation and good nutrition. They are the most vulnerable to disasters, armed conflict and systems of political and economic oppression and they are powerless to improve their circumstances. These conditions often carry with them dysfunctional family and societal relationships, paralyzingly low self-esteem, and spiritual darkness. Poverty is a lack of hope.

It’s clear that handouts and traditional aid are not enough to solve the problem of poverty and its many entanglements.

(1) http://endpoverty.org/effects-of-poverty/


Microenterprise changes everything for those trapped in poverty.

Microenterprise gives the poor the ability to start or expand their own businesses to become self-sufficient. Self-sufficiency puts the future back in their own hands, allowing them the dignity of feeding their own children and paying for their education, protecting their kids with healthcare and dreaming about their new-found success.

Microfinance offers poor people access to loans, savings and other basic financial services. People living in poverty require these types of financial services to operate their businesses and both manage and grow their assets, just like everyone else. The difference is, the poor can’t simply walk into a bank and take out a loan or open a savings account. In most cases, they have very little assets or collateral, lack credit histories and employment records, and may not even be able to read or sign their names.

For these reasons, the majority of formal financial institutions do not consider the poor to be creditworthy. Hard-working poor entrepreneurs often find themselves forced to deal with usurious money lenders and loan sharks. Microfinance – and specifically, microenterprise development or “small business development” – offers the poor an opportunity to access small amounts of loan capital and start their own businesses.

Growing small businesses allow the poor to earn their income with dignity, send their children to school and look after their sick relatives. Microfinance, especially when used to build up impoverished communities, is a proven and effective strategy, giving the poor the resources to break their chains of poverty.

(2) http://endpoverty.org/microfinance/