Poverty Alleviation Analysis

Introduction:

Although the international community achieved in 2010 the first Millennium Development Goal (MDG) to cut the 1990 poverty rate in half by 2015, a significant number of people continue to live in extreme poverty. The World Bank found that over one billion people lived on less than $1.25 per day worldwide in 2011. The MDGs, which were adopted at the United Nations’ Millennium Summit in 2000, call for a dramatic reduction in poverty and marked improvements in the health of the poor.

Microfinance institutions (MFIs) exist as one strategy for poverty alleviation. MFIs enable people to lift themselves out of poverty, to fund one another for their short-term needs, and to allow them to save either up, down, or through. According

MFIs that address the health needs of their clients, in additional to financial services, offer a more complete poverty alleviation solution. According to the Social Enterprise Associates, poverty is typically analyzed as an economic issue with level of income as the common measure used to determine an individual’s level of well being. In today’s world, however, it is critical to look at other deprivations, such as lack of food, housing, clothing, education, and healthcare. As such, MFIs become stronger and more viable in their mission to alleviate poverty when they take advantage of the service model to incorporate a dimension like health as a primary goal. It seems that the positive externalities are multi-fold, as a healthier clientele allows the improved success of MFIs in the future, as well as the ability of clients to pay back loans and sustain the MFIs. In restructuring their design to increase impact, MFIs can both fortify the financial goals of the institutions and meaningfully accomplish better health and education for their

The World Bank suggests that MFIs offer a unique infrastructure opportunity, although with challenges, to employ a global infrastructure for delivery and capacity of health-related services for the extreme poor. According to the study, health services offered by way of MFIs are a natural extension of their mission of financial security and social protection of the targeted client. The World Bank emphasizes in their study that healthier clients better serve the MFI’s goals of growth and long-term viability both for themselves and their clients. Increased health services coupled with efforts to improve incomes maximize benefits. For example, health programs providing information on better nutrition are incomplete without means for clients to increase incomes to purchase