| FIGHTING EXTREME POVERTY
According to recent estimates, 12.7% of the world's population lived on $1.90 a day (or less), or 896 million people.In 2012, just over 77.8% of the population affected by extreme poverty lived in South Asia (309 million) and sub-Saharan Africa (388.7 million).
While the reduction in the number of very poor people has been considerable since 1981 (then they were close to 2 billion), the road ahead is still very important. This is all the more so as new factors of impoverishment have emerged, in particular global warming , which in many places is leading to sharp reductions in annual rainfall, declines in agricultural yields and soil degradation. This process of desertification extends over vast areas (25% of arable land) that gradually become unsuitable for agriculture. The destruction of forest cover, the depletion of water resources and fishing also have a direct impact on the ability of the most vulnerable populations to feed themselves and lead to considerable population movements: rural exodus to cities, often overwhelmed by the influx of these populations, which are piling up in slums and development of migration between poor countries and to rich countries.
These factors, combined with population growth, tend to increase the number of poor people. Under these conditions, the fight against extreme poverty remains a major objective and concerns both rich and developing countries.
The activity of Solidarity Microfinance is part of the great movement to fight against extreme poverty.
| WHY MICROFINANCE?
Creation of economic activities
The poorest people do not have access to traditional financial services such as those offered by banks. We are therefore talking about a problem of financial inclusion. In doing so, a poor person who wants to borrow a small amount to develop a small economic activity, to finance the basic needs of his family (eating, dressing and having a place to sleep), often has to rely on usurers, local informal lenders who charge very high interest rates . A synthesis of 28 studies on informal credit interest rates from 14 countries in Asia, Latin America and Africa concludes that 76 per cent of interest rates charged by local lenders are above 10 per cent per month, and of these, 22 per cent exceed 100 per cent per month. These loans often lead to over-indebtedness (inability to repay) and prevent the creation of small, viable economic activities.
The role of microfinance is to lend small sums, at limited rates, to enable men and women who wish to do so, to start a business, and to become economically autonomous and able to meet the basic needs of their families.
In the same way, it is extremely difficult for a poor person to save money: living conditions, especially in slums, make it almost impossible to keep some money safe. Microfinance institutions therefore offer, in addition to loans, savings services to their clients. This possibility of saving is absolutely essential to allow poor households to build up security savings to be able to cope with the unforeseen events of life (illness, accident, death, etc.).
What is social microfinance?
Social microfinance in the sense of the NGO Entrepreneurs du Monde is an approach to microfinance that seeks to maximize social impact to fight against extreme poverty.
To this end, Entrepreneurs du Monde is developing an offer of socio-economic (non-financial) services adapted to very disadvantaged families, in addition to financial services (loans and savings) themselves.
These services are:
- basic training in the management of the income-generating activity,
- individualized follow-up of the activity,
- awareness-raising: human rights, health prevention, schooling and education of children, etc.,
- social referencing provided by social workers
| WHY ACCESS TO ENERGY?
40% of the world's population (nearly 3 billion people) still depends on wood and charcoal for its energy needs, with considerable negative impacts: massive deforestation, respiratory diseases linked to harmful smoke fumes (the WHO estimates that 4 million annual deaths related to the inhalation of these fumes, mostly women and children), and high costs for families (the means used being very inefficient, they consume a lot of fuel).
In addition, most poor families do not have access to electricity, so they use basic means, such as kerosene or oil lamps, to light themselves. However, these lamps do not illuminate well and pollute the atmosphere of homes. However, light up is a necessity (if only for children who go to school and have to do their homework), especially in tropical countries where night falls very early all year round. Under these conditions, it is not surprising to note that 25 to 30% of the budget of poor families is devoted to the purchase of wood or coal and kerosene.
To address these issues, Entrepreneurs du Monde develops product distribution networks offering clean and economical lighting and cooking solutions: improved wood and coal fireplaces, individual and professional gas fireplaces, solar lamps, solar kits.
The ideal cooking method is gas: it is the cheapest and least polluting while allowing quick cooking, without the need to light a fire and wait for embers. It reduces the time spent cooking food (freeing up time to care for children and to carry out small economic activities) and avoids breathing in harmful fumes.
| ACTIVITY REPORTS
For more information on Solidarity Microfinance activities in developing countries, our latest integrated reports can be downloaded: