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Promoting Inclusive Markets and Financial Systems

The Value Chain Framework and the Very Poor


The Value Chain Framework and the Very Poor

Over the last couple of decades, the value chain approach has transformed the lives and livelihoods of hundreds of thousands of low-income families across the world. Its very success in fostering more competitive markets in a rapidly growing global economy has started narrowing its ability to serve one key client base: the very poor. The approach calls for laser-like focus on identifying and addressing weak or potential links in the chain of actors and services that take commodities from raw material to the end market, with an end goal of strengthening entire sectors, and ultimately local, national and regional economies. Along the way, the very poor farmers, producers, and households—with their scarce resources, unreliable cash flows, and limited access to information—may not participate in these productive value chains. In their effort to foster broad-based economic growth, value chain programs often inadvertently crowd out these vulnerable and disadvantaged households who may lack the capacity to compete. For nearly eight years, the USAID/DCOF-funded, FHI 360-led STRIVE (Supporting Transformation by Reducing Insecurity and Vulnerability with Economic Strengthening) program has tested the effect of these types of market-led economic strengthening initiatives on micro- and small-sized enterprises (MSEs), households, and children to fill current knowledge gaps on effective approaches to reducing the vulnerability of children and youth.

1 This report shares the key lessons that STRIVE learned through those efforts—lessons for development practitioners—that are grounded in qualitative and quantitative research conducted by STRIVE on the impact of economic strengthening initiatives on multiples levels: businesses, households, and children.

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