Poverty & Income Generation

Poverty & Income Generation

Poverty & Income GenerationOne-fifth of the world is living in absolute poverty, defined as having less than one dollar per person per day. One-quarter have no access to health care or to clean drinking water. 190 million children suffer from chronic malnutrition.

There are many ways of attacking poverty and those with most impact often operate at national or international level. An example is the growth of the Information Technology sector in India.

But one powerful smaller tool is the Small Loan or Micro-finance type of project. The best known is the Grameen Bank of Bangladesh, which by the end of December 2007 had 7.41 million borrowers, 97 percent of whom are women. Borrowers do not need collateral, so the bank reaches the poorest of the poor, covering 96 percent of all villages in Bangladesh.


Micro-finance is a tool to address poverty and assist people to generate an income.

Inspired by the original idea of the Grameen Bank, the Grameen Foundation has created a global network of 58 microfinance institution partners in 23 countries. With tiny loans, financial services and technology, they help the poor – mostly women – to start self-sustaining businesses to escape poverty. On the website are client success stories, an e-newsletter, books and publications, important links, a newsroom and a video room which provide a lot of information on microfinance (mostly in English, sometimes also in Arabic and Spanish).

  • The video Breaking Through shows the impact of microfinance and lives it has changed. The film is also available in an Arabic version.
  • "Improving Microfinance through Telecommunications" describes Village Phone – a powerful example of how poor rural people can sustainably benefit from information and communication technologies
  • Mifos is an open source technology for microfinance, which Grameen has implemented in several countries.

The International Food Policy Research Institute has several publications in various languages about poverty reduction and many other issues, especially in the food sector.

The SDC Agriculture and Food Security Network focuses on Poverty Orientation, dealing with themes related to poverty reduction that cut across other rural development areas. Current topics are Food Security, Livelihood Approaches, Poverty Reduction Approaches, Pro-poor Growth in Rural areas and HIV/AIDS.

  • The SDC resources section contains documents as well as CDs, videos and other media. It's not a comprehensive collection of documents but rather a selection of highlights from different sources, including relevant SDC (Swiss Agency for Development and Cooperation) documents. Some of the documents can be directly downloaded, others can be ordered at SDC or other organisations, or have to be bought. It also offers platforms for thematic discussion groups and Communities of Practice.

The Consultative Group to Assist the Poor (CGAP) has microfinance publications including training manuals (free to download) in a number of languages (English, French, Russian, Chinese, Arabic, Spanish, Bahasa and Portuguese).

The Rural Finance Learning Centre aims to assist organisations in developing countries to build their capacity to deliver improved financial services – ones which meet the needs of rural households and businesses. They provide guidelines for trainers, online lessons, self-study guides, training tools (such as a 'marketing mix' board game) and videos.

Handicap International commissioned a study on the practices of funding for self-employment activities of people with disabilities (PWD), with a special focus on access to microfinance.

The overall goal of the study was to produce a framework document highlighting good practices, strategies, tools and operational methods that guarantee the efficiency and sustainability of self-employment projects for PWDs. This paper summarises the findings and good practices as presented in the framework document, based on the results of a literature review, a survey and field research. It is not a scientific paper, as it is primarily meant for practitioners.

In recent years, there has been a rapid increase in the number of microfinance institutions and clients. However, microfinance services remain limited in rural areas which are often sparsely populated and poorly developed in terms of economic and physical infrastructure. Efforts are, therefore, needed to identify rural finance approaches -savings and lending systems- that respond to the needs and capacities of poorer clients and rural entrepreneurs. The publication from Agromisa and CTA (Technical Centre for Agricultural and Rural Cooperation), The Rural Finance Landscape, describes current savings, lending, and insurance practices, identifies the service providers working in the informal, semiformal and formal sector and discusses current approaches and methodologies. It targets those who want to know more about rural finance as well as development practitioners concerned with identifying the financial services most appropriate for their project or organisations. Available in English, French and Portuguese.

Value chain development

The concept of value chain is explained in a working paper on Donor Interventions in Value Chain Development by the Swiss Agency for Development and Cooperation that highlights the most important issues that development agencies need to consider when they engage in value chain development in rural areas. The paper offers guiding principles for development practitioners and policy makers, and points to further useful material.

Value chain is described as a model. The model takes up the fact that a product is rarely directly consumed at the place of its production. It is transformed, combined with other products, transported, packaged, displayed etc. until it reaches the final consumer. In this process the raw materials, intermediate products and final products are owned by various actors who are linked by trade and services, and each add value to the product. Various types of public and private services, like business development services, electricity, transport, financial services, etc., are as important as favourable framework conditions, i.e. laws, regulations and their enforcement.

A Handbook for Value Chain Research, prepared for the IDRC, provides a broad overview, defining value chains, introducing key concepts and discussing the contribution of value chain analysis as an analytical and policy tool in part 1 of the book. Part 2 is concerned with underlying theoretical constructs in value chain analysis. In Part 3 a lay out of a methodology for undertaking value chain research is given.

The Value Chain Analysis for Policy-Makers and Practitioners, developed in partnership by the ILO and Rockefeller Foundation, is a guide that is targeted specifically toward policy-makers and planners at different levels of government, business associations and trade unions and others responsible for developing strategies for enterprise development and local economic development. Section 1 presents the key insights of the value chain approach and the questions it raises about how the global economy is organized and how local enterprises can participate more effectively in it. Section 2 sets out why this new analytical approach is important for policy-makers and practitioners. Sections 3 to 8 tackle specific policy problems and provide practical ideas about how to address these challenges. The section headings should help you to find quickly what is most relevant for your situation. To some extent the sections build on each other, but the guide can be read selectively.

Developing value chains that are within competitive industries has specific challenges when the majority of micro- and small enterprises are extremely poor. The paper Value Chain Development and the Poor, draws from the experiences of SEEP members working on value chain development with the poor and presents lessons gleaned from the Value Chain Working. Markets hold significant power to create or combat poverty. Increasingly, international development initiatives focused on economic growth and/or poverty alleviation are working to open existing markets to poor producers and consumers and make the benefits of well-functioning markets more widely accessible to the poor. The challenge for development practitioners is to promote economic growth strategies that improve the competitiveness of industries.

Human Rights & Poverty

Many of the issues that 'development', 'environmental', 'social justice' and 'human rights' groups work on – these are often one and the same.

Human Rights & Land Reform

Prof. Gerard Mols, Dean of the Faculty of Law, University of Maastricht said at a conference in 2002:

“Globalisation can be an instrument to end hunger, poverty and slavery, but at the same time it can facilitate infringements of human rights.

The forced shift from subsistence to cash crop agriculture, the loss of common land, and government policies that suppress farm income in favour of cheap food for the cities have helped bankrupt millions of peasants and drive them from their land- sometimes into slavery.

It is significant that a whole series of FAO studies has shown that small landholders produce more food per acre than larger landholders do.

Mols argued that the right to land deserves multidisciplinary attention. Human rights should be at the basis of this approach since the fight against hunger, poverty, new slavery and isolation need no other justification than the call for human rights

Read the whole text (starts on p. 3) (128kb doc)

Go to www.hrw.org and type “land reform” into the “search” slot – they have reports on South Africa, Zimbabwe and many more.

An oddball site is at www.progress.org/land

Human Rights & the environment

A good address for the start of your search for more information: www.sierraclub.org/human-rights

The relationship between, humans, wild animals and the environment: CASE STUDY: Zambia

Fair Trade

From Rigged Rules and Double Standards – Trade, globalisation and the fight against poverty:

"Trade is one of the most powerful forces linking our lives, and a source of unprecedented wealth. Yet millions of the world's poorest people are being left behind. Increased prosperity has gone hand in hand with mass poverty. Already obscene inequalities between rich and poor are widening.

World trade could be a powerful motor to reduce poverty, and support economic growth, but that potential is being lost. The problem is not that international trade is inherently opposed to the needs and interests of the poor, but that the rules that govern it are rigged in favour of the rich."

Read the full report (PDF) from www.oxfam.org

Read the New Internationalist's online issue on Fair Trade , from 2000.

The Fairtrade foundation is a small but growing movement that offers a progressive alternative to the conventional model of trade.


Examples of ways to alleviate poverty

Tools for Self Reliance in Africa. This UK-based organisation works with local partners to relieve poverty in Africa by supporting small businesses. It funds business skills and other training projects in Ghana, Tanzania, Uganda, Sierra Leone, Zambia and Malawi. And each year it puts tens of thousands of refurbished tools and sewing machines into the hands of people who really need them.

Apiculture and poverty alleviation in Cameroon [part 1; part 2]. FAO trade statistics show that Cameroon imports annually honey worth US$700,000. This does not reflect the amount of honey that is produced and consumed locally. Local communities in Cameroon have always harvested honey from the wild and many still do so. Honey is consumed as a beverage and is used in the preparation of many traditional medicines. This article highlights the role of beekeeping in biodiversity conservation and poverty alleviation in Cameroon.

Homestead catfish culture in Bangladesh. From the introduction: A large part of the population of Bangladesh is poor. The poorest of these poor find themselves in a vicious circle, because they donít have sufficient back-up funds to prime income-generating activities. Many attempts have been made to break this circle. Instead of providing money or other means to acquire resources to generate income, another approach to the poverty-problem is to try to find a way to generate income with resources available to these poorest people. In Bangladesh, most poor people can work, have access to land on which their shack is built, what the area (or fields) around it can provide, and water. An income-generating activity making optimal use of these resources is homestead catfish culture, as was practised locally in the project area of the Compartmentalization Pilot Project (CPP) in the central region of Bangladesh. This practice was taken up by the CPP, and further refined into a homestead fish-culture programme

Poverty alleviation through livestock development. The impact of economic reforms introduced by the Vietnamese government in the 1980s and in the 1990s has benefited the lowland areas more than the uplands which remain the poorest parts of the country. Livestock development has been identified by the Governmentës Comprehensive Poverty Reduction and Growth Strategy as one of the priorities to reduce poverty. The overall goal of the project is to increase farmerís incomes by strengthening appropriate, sustainable and replicable livestock services and livestock production systems. The projects showed that the strengthening of veterinary capacities is able to support small investments in pig production by farmers. Based on this experience, a new project will work with a wider range of public and private providers of livestock services at a greater scale (143 communes and 6 districts) to enable pig and poultry development by Farmersí Interest Groups.

The Drum Beat 463 addresses the problem of food scarcity, including food distribution, the effects of the loss of farming knowledge due to AIDS, and the risks posed by weather changes, as well as fundraising tactics for food aid programmes. It looks equally at food security and the role of communication in increasing the dissemination of knowledge associated with food production.

"SEEDS" is a series of online booklets about innovative and practical program ideas developed to address the economic roles and needs of low income women. Introductory booklet about SEEDS including information on how to receive all SEEDS booklets. If you go to the following website: http://www.popcouncil.org/ and type SEEDS in the search bar, all the booklets up till now will show up as free pdf's. 


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