Microfinance and Poverty Reduction

Microfinance and Poverty Reduction

An Empirical Evidence From Benin Metropolis South-South of Nigeria

eBook - 2014
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This book is an empirical study of how microfinance impacts on poverty reduction in Nigeria. The book examined conceptual issues in poverty and microfinance with focus on the nature and incidences of the poverty phenomenon, justification for the establishment and growth of microfinance in Nigeria. This book with theoretical and empirical findings investigates the previous attempts by the governments in alleviating poverty and specifically how microfinance have helped in reducing the poverty menace especially since the promulgation of the microfinance banking act in 2005 by the Central bank of Nigeria.   Auszug aus dem Text Text Sample: Chapter, 2.1 Definition and Meaning of Poverty: Poverty is a symptom of an improper society; the people are the victims, Mohammed Yunus, 2011. Perhaps, one of the most contentious and serious problems facing humanity today is that of poverty. Poverty may include an inability to meet ones physical needs and other kinds of deprivations ranging from people's lack of housing/ shelter, medical care, education including clothing and physical wellbeing, (Shillington et al, 2009; O'Boyle, 1991; Jitsuchon, 2001). Defining the concept of poverty in absolute terms is in fact difficult because there is no consensus measure or single meaning of poverty and defining who is poor (Rosenfield, 2010; Spicker, 1999; Akindola, 2009). However, some definitions are worth viewing. According to O' Boyle (1991, p.1) 'Poverty is a problem in unmet human physical needs. That is persons and families in poverty lack the goods and services needed to sustain and support life and the income to purchase the goods or services which would meet those needs'. Weisfeld & Andrzejewski (2008) distinguished between two types of poverty; vis-à-vis income poverty and human poverty. According to them, income poverty is based on the understanding or defining
of poverty in monetary income terms, this measure popularly used by the World Bank and the United Nations (UN) is regarded as the poverty line method. According to World Bank, this means that people living on less than 1.25 are in extreme poverty, while those living on less than 2 per day are in moderate poverty. In other words, human poverty includes material deprivation of people. This includes lack of basic needs of life like housing/ shelter, clothing, proper diet and other social deprivations such as 'denial of employment, participation in social institutions and education' (Weisfeld & Andrzejewski 2008, p. 2). The World Bank 2000 explained poverty as follows; Poverty is hunger, lack of shelter, being sick and not being able to see a doctor, not having access to school and not knowing how to read and write, not having a job, fear for the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation and freedom from servitude. Poverty is living in abject squalor and hopelessness (World Bank 2000, p. 52). According to Townsend (2010, p. 99), poverty is defined by an inadequate resources of people which 'fall seriously short of the resources commanded by the average individual or family in the community in which they live, whether that community is local, national or international one'. For the World Health Organization (WHO): Poverty is associated with the undermining of a range of key human attributes including health. The poor are exposed to greater personal and environmental health risks; they are not well nourished, have less information and are less able to access health care. They thus have a higher risk of illness and disability…, The poorest of the poor around the world have the worst health (WHO, 2012). This definition explains succinctly the
devastating health consequences and risks associated with poverty. In a similar vein, the United Nations (UN) defines poverty as 'a condition characterized by severe deprivation of basic human needs including food, health, shelter, education, and information. It depends not only on income but also on access to services' (UN, 1999: 57; quoted in Spicker 1999, p. 232). Furthermore, Spicker (1999), opined that poverty has different meanings 'linked through a series of resemblances', he identified 12 clusters of meanings to poverty. The first is that poverty is a 'material concept', which means that people are poor because they lack the basic needs of life like shelter, food, clothing and water. The second meaning is that poverty is a pattern of deprivation; by this he means that it is not just as a result of lack of needs but the 'pattern of deprivation' and duration of time in which the deprivation persists. The third meaning is that poverty is associated with limited resources; that is, the unavailability of adequate income and resources to meet ones 'essential needs'. This is particularly true of Nigeria because for instance, there are poor people that can barely afford to pay for transportation to the hospital even if they would get free medical care/service. The fourth definition or meaning according to Spicker is that poverty is as a result of one's economic circumstances caused by low disposable income. Similarly, the fifth meaning sees poverty as a result of low standard of living of individuals or families falling below acceptable standard or level. Inequality is the sixth meaning of poverty. According to Spicker, people are said to be poor because 'they are disadvantaged when compared to others in the society' who are living in wealth and opulence. The seventh meaning which is similar to the sixth is that poverty is defined in terms ones
socio-economic class and position in the society. According to Spicker, the social stratification of the society placed some members in a higher position/class and others in lower position/class that have poor means of livelihood and have little or nothing to cater for their needs. Similarly, dependency, lack of basic security and exclusion are the eighth, ninth and tenth meaning of poverty. The eleventh meaning is Lack of Entitlements; according to Spicker, people are poor and hungry not because there is no food, but because they cannot afford to buy the food that exists. The twelfth and last meaning of poverty according to Spicker is that it is a moral judgment. Piachaud, 1981 quoted in Spicker, 1999 puts it thus; 'poverty consists not just of hardship but of unacceptable hardship…, it carries with it an implication and moral imperative that something should be done about it. Its definition is a value judgment and should be clearly seen to be so'. The twelve clusters of meaning of poverty have to do more with the way the term is used by different people 'rather than with the elements of definitions' (Spicker 1999, p. 238). Shillington, et al (2009, p. 2) defined poverty as 'a human condition characterized by sustained or chronic deprivation of the resources, capabilities; choices, security and power necessary for the enjoyment of an adequate standard of living and other civil, cultural, economic; political and social rights'. In summary, poverty is defined in this study as a condition of acute deprivation preventing a person from living a life of adequate wellbeing. The following different definitions bring to fore the different perspectives and understanding of what the concept of poverty is all about. As a result, it will be germane to further espouse on the meaning of this concept of poverty by explaining four different approaches which are;
Monetary Approach, Capability Approach, Social Exclusion Approach and Participatory Approach. These approaches serve as a clarification to the various definitions above and also provides an 'alternative understanding' of poverty or who is poor? (See Laderchi, Saith,& Stewart 2003). Monetary Approach: The monetary approach to the understanding of poverty is mostly used by economics to define and measure poverty. This approach sees poverty as a phenomenon caused by lack of adequate monetary finance to meet the daily needs of life. It is popularly called the 'Poverty Line' method. The monetary approach originated from the famous works of Booth and Rowntree in their different studies of London and York in the late nineteenth and early twentieth century respectively. But Rowntree's work on the survey of York which was undertaken starting from 1899 is generally believed to be the first major scientific study of poverty. According to Laderchi (2006), this research work of Rowntree is 'generally described as the first scientific study of poverty mostly because of the high level of sophistication he applied in deriving a modern poverty line and in particular in estimating the minimal food requirements for maintaining efficiency on the basis of recently calculated nutritional standards. Such minimal requirements, together with those necessary for the purchase of clothing and rent, were added up to identify a poverty line, so that households whose income level fell below it were deemed to be in primary poverty' (Laderchi 2006,p. 6). The Monetary approach has always been used to define and explain poverty in Nigeria; the understanding and definitions by most writers in Nigeria are usually focused on deprivation, inadequacy, consumption and income (Ugiagbe, 2012). This concurs with Tella 1997 (quoted in Ugiagbe 2012, p. 16), 'people are poverty stricken when
Publisher: Hamburg : Diplomica Verlag, 2014
Edition: 1st ed
Copyright Date: ©2014
ISBN: 9783954896738
Branch Call Number: Electronic book
Characteristics: 1 online resource (85 pages)
Additional Contributors: ProQuest (Firm)


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