Essential Questions:
1.) Why is it difficult to escape poverty?
2.) How can the poverty cycle be broken?
Unexpected natural disasters and lack of shelter, sanitation, good nutrition, education, and income are just some of the obstacles that keep people in poverty. These people live in absolute, moderate, or relative poverty. Sacrifices are common to save money, whether it's compromising on nutrition, or education. For them, life would go on until any sustainable intervention.
Although people in poverty, especially absolute poverty, struggle to earn enough to pursue some dreams and plans they had in life to earn a living out of, KIVA is such a site that can give micro-loans to many such people around the world. KIVA lets us choose which person we want to loan $25 to. The difference between KIVA and an NGO is that KIVA loans a small amount of money, and once the person's life becomes more stable and starts to grow, then they have to pay the amount loaned back. KIVA doesn't take interest, so how come the total deposits are less than the amount lent? We can recycle the amount lent to many people. For example if we give someone $25, when they pay the $25 back, I can use those same $25 to give a loan to someone else. That way, I actually only deposited $25, but lent $50 (2 people). KIVA makes sure the people have a clear vision and solid plan, because there are potential drawbacks of providing a poor person with a micro-loan, like they might not know how to wisely spend the money and instead use it for bad habits or shady work. They might also just take the money and not make an effort to change their live with the money, which would mean the amount lent would get wasted. KIVA says only 1% haven't paid back their loans. KIVA ensures the people in poverty a chance to give whatever their business is, a kick start to support themselves and their families. This sustainable intervention is what will let many people escape the poverty cycle.
1.) Why is it difficult to escape poverty?
2.) How can the poverty cycle be broken?
Unexpected natural disasters and lack of shelter, sanitation, good nutrition, education, and income are just some of the obstacles that keep people in poverty. These people live in absolute, moderate, or relative poverty. Sacrifices are common to save money, whether it's compromising on nutrition, or education. For them, life would go on until any sustainable intervention.
People in absolute poverty live on an average poverty threshold of less than $1.25 a day. They cannot afford basic needs like a proper education, shelter, sanitation and so on. The reason it is difficult for them to escape the poverty cycle is because since they cannot afford basic needs, therefore don't have many ways to earn a living to support the family. People in absolute poverty often have lack of education which leads to lack of employment, resulting in no source of income. Without the money, no one in Absolute poverty can expand their thinking and ideas that they might have had. People living in relative poverty have a monthly income of $2,000 which is significantly less than that of the average household in Singapore with $10,000 as their monthly income. People with $2,000 as the monthly income are placed as the bottom 20% in Singapore. In a developed country, they would probably go to school but no one in their family would have gone to college. They would be able to afford cheaper foods only, such as fast foods, therefore wouldn't be able to get the nutrients their body needs.
Although people in poverty, especially absolute poverty, struggle to earn enough to pursue some dreams and plans they had in life to earn a living out of, KIVA is such a site that can give micro-loans to many such people around the world. KIVA lets us choose which person we want to loan $25 to. The difference between KIVA and an NGO is that KIVA loans a small amount of money, and once the person's life becomes more stable and starts to grow, then they have to pay the amount loaned back. KIVA doesn't take interest, so how come the total deposits are less than the amount lent? We can recycle the amount lent to many people. For example if we give someone $25, when they pay the $25 back, I can use those same $25 to give a loan to someone else. That way, I actually only deposited $25, but lent $50 (2 people). KIVA makes sure the people have a clear vision and solid plan, because there are potential drawbacks of providing a poor person with a micro-loan, like they might not know how to wisely spend the money and instead use it for bad habits or shady work. They might also just take the money and not make an effort to change their live with the money, which would mean the amount lent would get wasted. KIVA says only 1% haven't paid back their loans. KIVA ensures the people in poverty a chance to give whatever their business is, a kick start to support themselves and their families. This sustainable intervention is what will let many people escape the poverty cycle.
My learning about the poverty cycle has helped answer the essential questions why it is difficult to escape the poverty cycle, and how it can be broken. Understanding the conditions of people in absolute, moderate, and relative poverty make us realise that it isn't easy to escape the poverty cycle. Without an income, we cannot build our own life. But although it is very difficult to escape the cycle, sites like KIVA have given many poor people a chance to expand their business and keep the intervention sustainable. If we can give the poor people one chance to expand their business, many can escape the continuous poverty cycle.
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