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Impact of microfinance institutions in poverty alleviation in rural area in Rwanda case study COPEDU Ltd Rwamagana branch

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par Gédéon niyoduenga
UR-CBE - AO 2016
  

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2.8.1:Definition of poverty

Poverty is a condition in which a person of community is deprived of the basic essentialsand necessities for a minimum standard of living. Since poverty is understood in manysenses, the basic essentials may be material resources such as food, safe drinking water and shelter, or they may be social resources such as access to information, education,health care, social status, political power, or the opportunity to develop meaningfulconnections with other people in society.

According to the World Bank's (1980) definition of poverty, «A condition of life socharacterized by malnutrition, illiteracy, and disease as to be beneath any reasonabledefinition of human decency». Ghalib Assad K. (2007)

The (World Bank 1998; 6), acknowledge that poverty can defined by considering different elements; level of income of population social indicators such as of illiteracy or asses to health care. So it defines poverty as condition of life characterized by malnutrition, diseases and no asses to health facilities, state of illiteracy.

Poverty is the social-economic phenomenon where by the resources available to a society are used to satisfy the needs the few while the majority do not have these necessities met (KUREIN 1986; 64).

According to (Thomas Stephen 1998; 6) Poverty is milt-dimensional phenomenon consisting of a number of different characteristics. He further indicated that incomes, demographic, health and education and social conditions found at community and households' levels need to be inclusive among those characteristics.

Poverty many refer to lack of physical necessities such as food and clothing, assets and incomes. It is perceived as a problem when levels of disposable income and resources are inadequate to support a minimum standard of living. So poverty is defined by many people living below specified minimum level of income, an imaginary internal poverty line and such line knows no limit and is independent of nation per capita income (Michael P. Todaro, 1994;261).

According to the Clark E. Cochman et al(1994; 208) defined poverty in two ways,namely;absolute and relative poverty.

Absolute poverty refers to minimum level of well being in nutrition, shelter, clothing, etc. Then what determines sufficient income is to maintain this level by considering family size and other factors such as ages of family members and location.

Relative poverty on the other hand does not relate to a particular level of material well being members of the society.

Here, a family is considered poor if its resources place it well below a normal standard of living no matter how extravagant that standard might be.

Thus relative poverty definition defines poverty as any family income below one half the nation's medium family income.

According to (Renate Schubert 1994; 18), relative poverty is where the subjects under consideration are poor in relation to others who remain to be more closely specified.

In the book entitled «Uganda growing out of poverty» defines poverty by using two approaches; relative and absolute poverty (World Bank 1993; 18).

Relative poverty means that some people are poorer than others. This is realized when the different between the richest and the poorest is intolerable. This is in the sense that the poor are deprived of many goods and services which others take for granted. In general, relative poverty is when the people are defined as the poor relation to the community they use as reference group.

Absolute poverty means that lack of food, assets and cash. It is a condition degraded by diseases, illiteracy and malnutrition to deny people basic human necessity.

It is thus a condition of not able to obtain the basic needs of life or where deprivation is severalthat basic needs of life can scarcely be met. It is important to remember that experience and effect of poverty are unique for each individual, household and community and that no two people experience it in the same way. For analytical and policy development purposes we need some standardized definitions of poverty at all these levels (PRSP:2000).

At an individual level, a man or a woman is considered poor if they are; confronted by a complex of inter-inked problems and can't solve them; do not have enough land, income and other resources to satisfy their basic needs.

At household level, land owned, household size and the characteristics of the head of households were important criteria for poverty definition.

At community level, the shortage of economic and social infrastructure and natural resources are important criteria for poverty analysis.

According to Tony Belton et al(1982;94), poverty is then essentially a relative concept, a condition measurable in terms of living standards and resources of any society at a particular time. For instance a person seen as poor in Britain in 1981 will have better absolutely living standard than someone living in the slums of Rio de Janeiro. People are poor in their incomes, even if adequate for survival, fall markedly below those of the community (Galbraith 1987; 252).

In generally; poverty can be defined as a state of «deprivation» which may take several forms; it may be personal, economic, social, cultural or political.

Personal or physical deprivation includes deprivation in term of health, nutrition, disability, human capital, emotional deprivation is and confidence.

Economic deprivation isin term of incomes, asset, access to market, access to public facilities and environment resources.

Cultural deprivation would mean people deprived of beliefs, knowledge, value, information and altitude.Political deprivation is seen in terms of deprivation of voice at local, provincial or national level.

Social deprivation involves barriers to full participation in social, political and economic life.

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"La première panacée d'une nation mal gouvernée est l'inflation monétaire, la seconde, c'est la guerre. Tous deux apportent une prospérité temporaire, tous deux apportent une ruine permanente. Mais tous deux sont le refuge des opportunistes politiques et économiques"   Hemingway