What is the role of microfinance in reducing poverty in poor communities?
Poverty and gender inequality are closely linked in many societies, with women and girls facing a disproportionate amount of harm from poverty due to the prevalence of gender-based discrimination. In particular, women are often overrepresented among those who are living in poverty, such as in South Asia and Sub-Saharan Africa—in India, for example, women account for more than 60 per cent of people who are living in extreme poverty. This is largely due to reduced access to resources due to gender-based discrimination, which puts women and girls at a disadvantage compared to their male counterparts. Gender-based discrimination in educational and economic opportunities also means that women often disproportionately lack the skills and resources needed to escape poverty. This is further compounded by gender-based violence, which again disproportionally affects women and can create additional barriers to economic security. These factors mean that women and girls are more likely to experience poverty, and for longer periods of time than men. Consequently, reducing poverty and promoting gender equality must go hand-in-hand in order to create a more equitable society for all.
Political instability is widely recognized as playing a major role in the persistence of poverty. This is because political instability can create an environment of uncertainty and chaos, both of which can severely disrupt economic and social structures. Political instability can lead to a breakdown in the rule of law, lack of economic investment, and reduced access to resources, all of which are key components of poverty. As well, political instability can lead to inefficient or corrupt government institutions, which can contribute to the wide gap between the wealthy and the have-nots. Additionally, political instability can lead to food shortages, rising unemployment, and even the displacement of people, all of which can contribute to a cycle of poverty. In other words, the effects of political instability can contribute to a lack of economic opportunity, long-term economic hardship, and widespread poverty.
In developing countries, rural poverty often differs from urban poverty in a variety of ways. In general, people living in rural areas are more likely to be in extreme poverty than those living in urban areas. This is because rural areas often face an array of challenges that urban areas do not, such as inadequate access to healthcare, education, and other basic services. Additionally, people living in rural areas often rely heavily on subsistence agriculture to make a living, making them particularly vulnerable to shocks from climate change or economic downturns. Finally, rural areas in developing countries often lack the necessary infrastructure, including roads and communication networks, to support economic growth and make it easier to access resources and improve people’s livelihoods. All of these factors contribute to the gap between rural and urban poverty in developing countries.