Reader Question: What Holds Most Promise to End Poverty?

From Nancy Fitzpatrick – What projects sponsored by the “first” world hold the most promise for helping people permanently lift out of poverty – or at least out of extreme poverty?

Nancy, thanks for your question.

Savings-led microfinance is one of the primary ways that CRS helps people move out of poverty.

CRS is using savings-led microfinance to serve more than 800,000 people around the world, and. tThey have saved more than $18 million. These services provide poor and marginalized households with access to safe savings and credit, often for the first time, allowing them to manage well their scarce resources and accumulate assets, laying the foundation for them and their children to break the cycle of poverty. The poverty reduction impact of these projects is very promising—participants are able to pay school fees for their children, eat more during the hungry season, and expand their microbusinesses. Women represent the majority of participants in CRS’ savings-led microfinance activities, and they say that they value the social empowerment of the methodology just as much as the access to finance.

Also, given that the majority of the world’s poor derive the majority of their income from agricultural activitiesdepend to some extent on farming, helping smallholder farmers improve their practices, link to markets and access appropriate financial services is an important poverty reduction strategy. At CRS, our agriculture and agroenterprise projects help poor farmers to equitably engage with the market, including private sector actors such as grocery stores, food processors and exporters. This is having a significant effect improving their incomes—for example, a A CRS chickpea project in Tanzania helped 5,000 farmers increase their net income by more than 30% by providing them with savings-led microfinance (the SILC methodology) and facilitating collective marketing ofhelping them market chickpeas to exporters.

– Melita Sawyer, program specialist – microfinance

In March, we invited you to ask questions of our staff. You asked really good questions. We’ll continue to post answers as they come in from staff around the world. And our invitation to you remains: if you have a question for our staff, please include it in a comment on any blog post and we’ll try to get answers as soon as possible.

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