NGOs%20and%20Microfinance

NGOs%20and%20Microfinance - Sustainable Economic...

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Sustainable Economic Development: What does it encompass? Sustainable economic development encompasses much more than mere growth in per capita income, improvements in health, longevity, and literacy rates. To be sustainable, the development process must also address the issues of: 1. Empowerment of the individual 2. Civil society An outcome of empowerment is the emergence of “civil society” that embraces democratic processes at the grass-roots level. Page 1 of 12
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What do we mean by the term “Empowerment”? Empowerment is the process of increasing the capacity of individuals or groups to make choices, and be able to transform these choices into desired actions and outcomes. In short, empowerment is about enabling people to take charge of their own lives and destinies. Central to this process are actions which both build individual and collective assets so that wealth creation can occur. A successful microfinance scheme is an example of an action which builds individual and collective assets, and which enables wealth creation. Empowered people have freedom of choice and action. This enables them to better influence the course of their lives and the decisions which affect them. Empowered individuals interact with other members of their community in ways that generate positive externalities. One of these positive externalities is the building of a “civil society” that values accountability, responsibility, ethics at the level of the individual, group, community, and nation. Empowered individuals and the resulting emergence of a civil society enables long-term sustainable economic growth to occur. Why? There is an accompanying appreciation of and the expression of “the arts of democracy” – i.e., leadership, consensus-building, the creation of civic, business and voluntary organizations based on shared interests or values, Page 2 of 12
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and networking capabilities. From this culture or civil society, new and future leaders may be sourced. Page 3 of 12
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Non-Governmental Organizations (NGOs): A Supplemental Approach to Development NGOs are the missing puzzle piece in the development process. NGOs are an effective way of reaching out to the poorest of the poor and helps connect them to the formal economy. NGOs fill the gaps left by state-led development programs, which tend to be biased in favor of urban centers and urban development. NGOs circumvent wasteful, ineffective & corrupt central governments. NGOs fill the gaps left by market-led development ….which is focused on the formal sector of the economy. Market-led development works through the formal banking and financial institutions of the economy, so the beneficiaries of market-led development are members of the formal economy. NGOs act as a catalyst for empowering the disenfranchised members of
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NGOs%20and%20Microfinance - Sustainable Economic...

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