Promoting Inclusive Markets and Financial Systems
Literature Review on Poverty Reduction Strategies Aimed at the Very Poor
The failure of traditional poverty reduction programs in achieving deeper outreach to the very poor is a growing concern, as evidenced by the United Nation’s Millennium Development Goals (MDGs) which envision extreme poverty to be halved by 2015. Designing services to help the very poor often means taking into account the historic, sociopolitical and economic factors that contribute to the persistence of poverty. The very poor often lack even the most basic of services, such as food, health care, sanitation and access to clean water. In addition to economic development, programs aimed at the very poor need to focus on livelihood security and social protection, including microgrants, subsidies, cash transfers, etc. Financial services for the very poor include microloans, savings programs, and microinsurance; while non-financial services can range from “social intermediation” for functional literacy and social capital development and “business development services”(BDS) to develop entrepreneurship through business training, information,and market linkages. For the greatest inclusion of the poorest, organizations/practitioners need to assess what the needs of the poorest are and modify their programs accordingly. Programs tailored for the extremely poor may include provision of basic services such as health, nutrition, education and empowerment.