Introduction to

Poverty as a
Microeconomic
Problem
Poverty is a complex issue with far-reaching economic, social, and personal
impacts. At its core, poverty is a microeconomic problem, stemming from
individual, household, and community-level factors that trap people in a cycle
of deprivation and limited opportunities.
Defining Poverty: Measuring and
Understanding Its Dimensions

1 Income Poverty 2 Multidimensional 3 Relative vs. Absolute

Measuring poverty based
on low household income
or consumption levels.
Poverty Poverty
Considering other factors Comparing to national
like education, health, and standards or a global
living standards. minimum threshold.
Causes of Poverty: Individual, Household,
and Community Factors
Individual Factors Household Factors Community Factors

Low education, limited skills, Large family size, single Lack of infrastructure, limited
poor health, and lack of access parenthood, and job opportunities, and societal
to opportunities. intergenerational poverty. discrimination.
The Poverty Trap: Barriers to Escaping
Poverty
Low Income 1
Insufficient resources to invest in
education, health, and other
opportunities. 2 Lack of Assets
Inability to accumulate savings or invest
in productive assets.
Limited Access 3
Restricted access to credit, insurance, and
other financial services.
Microeconomic Interventions to Address
Poverty
Cash Transfers Skill Training
Providing direct financial assistance to low- Improving employability through vocational and
income households. entrepreneurial education.

Asset Building Behavioral Nudges

Helping individuals and households accumulate Designing interventions to promote positive
productive assets. financial and health behaviors.
The Role of Microfinance and Small
Business Development

Access to Credit Business Training Savings Mobilization

Microfinance programs provide Capacity building and technical Encouraging low-income
small loans to support assistance for small business individuals to build up financial
entrepreneurship. owners. assets.
Improving Access to Education and
Healthcare
1 2 3

Education Health Synergies

Investing in quality schools, Expanding access to affordable, The interplay of education and
scholarships, and adult literacy high-quality healthcare health supports human capital
programs. services. development.
Conclusion: Addressing Poverty through
Microeconomic Strategies
Cash Transfers Provide direct financial assistance to low-income
households.

Microfinance Expand access to credit, savings, and business

training for the poor.

Education & Health Invest in human capital development through

improved access.

Asset Building Help individuals and households accumulate

productive assets.

By implementing a comprehensive set of microeconomic interventions, we can empower individuals,

households, and communities to break free from the cycle of poverty.