When it comes to the fight against poverty, innovation is just as important as in any other field. Coming up with creative, sustainable solutions for such a massive problem is critical in any nation. However, it is more important in developing countries, where funds allocated for poverty reduction are often limited. By thinking outside the box, governments, private sector organizations and NGOs can effectively accomplish poverty reduction efforts across many sectors. Here are just a few innovations in poverty eradication in Uganda.
The Private Sector
In fact, the private sector is often where innovation originates and forward-thinking people thrive. Normally, many people think of poverty reduction as a job for governments and NGOs. However, by involving private corporations, the fight against poverty can work outside the bureaucracy that often impedes the work of governmental agencies.
Additionally, there is a large incentive for private businesses to get involved with poverty reduction. The world’s poor represents a largely untapped market of consumers. By lifting them out of poverty, businesses will create a larger client base and ultimately more profit. Today, 4 billion people are living on less than $8 a day. This segment of the population provides opportunities for expanded market development and human capital. Indeed, there is no shortage of entrepreneurs looking to work with this demographic.
Innovations in Poverty Eradication in Uganda
The private sector is where many innovations in poverty eradication in Uganda emerge. One particular business-focused innovation that has taken hold in Uganda is microfinancing. Microfinancing practices give small loans to fledgling entrepreneurs. Recipients use the loans to grow their businesses, create jobs and positively impact their communities. This opportunity for those traditionally excluded from the banking system to obtain credit has done lots of good, particularly in Uganda.
For example, The Hunger Project is taking its microfinancing efforts one step further. Not only is it promoting economic self-reliance, but it is ensuring the inclusion of women. Women even lead its microfinancing program, giving them an influential voice in their communities. Thus, microfinancing is one among many innovations in poverty eradication in Uganda.
Another success story is the Women’s Microfinance Initiative (WMI). WMI’s mission is “to establish village-level loan hubs. Local women administrate the loan hubs to provide capital, training and support services for women in East Africa. This is to help them engage in income-producing activities.” Since 2008, WMI has issued over $7.2 million in loans to more than 17,500 women in East Africa. The organization estimates that each loan provides a positive economic outcome for at least 20 people. Overall, this means that this program has reached over 350,000 individuals in the past 12 years.
The anecdotal evidence above as well as the available data show that microfinancing initiatives are effective innovations in poverty eradication in Uganda. According to the World Bank, the percentage of those living below the poverty line in Uganda decreased by 11.4% from 2006 to 2013. The organization credits much of this progress to agricultural innovations, many of which use microfinancing. This goes to show that often, innovation and progress happen from the bottom up.
However, if this progress is to continue, innovators looking to further innovations in poverty eradication in Uganda need to focus on malnutrition, education, sanitation and electricity. Without access to these services, innovation efforts will fall short. Therefore, a potential approach to poverty reduction in Uganda would be a blend of governmental, NGO and private sector efforts. Long-term, inclusive and sustainable solutions can go a long way toward reducing poverty in Uganda and elsewhere.
– Addison Collins