Promoting Inclusive Markets and Financial Systems
Often, very poor people have been unable to build diversified, reliable income sources without access to enhanced business opportunities, the financing that allows them to utilize these opportunities, and the on-going livelihood support services necessary for the success of their business ventures. The microfinance field, moreover, still has significant service gaps in reaching very poor populations. This is partly due to not all practitioners believing that the very poor can be reached sustainably or can benefit from such services. Moreover, identifying extremely poor populations has often proved to be a time-consuming, resource-draining, and costly process.
Through the LPP pilot project, the SfP and TLS team have developed and tested a composite poverty assessment and targeting tool to facilitate the identification and selection of the poorest households in its project area. The targeting and selection process has been documented in this use case to demonstrate one way for institutions to identify the poorest households in rural areas and thereby increase their depth of outreach in an efficient, easily replicable, and cost-effective way. The process and tools take into account the relative nature of poverty and incorporate methods to contextualize poverty and the way it is assessed. This multilayered filtering process ensures that interventions are reaching households not only living on less than $1.25/day, but are living well below localized definitions of poverty.
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