Poverty Elimination by NGOs

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Assessing NGO’s performance in poverty reduction is a difficult task. However, it is worth learning from other observations conducted on NGO performance in alleviating poverty

NGOs have increased the scale on the type of roles they play. In this contemporary time, NGOs are tremendously working, and helping government, institutions, and the rural poor in the fight against poverty in Sub-Saharan African, which was their traditional role during the World Wars.

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Although NGO’s are appraised for their tremendous work, other scholars have opined that they do not see their essence due to the fact that many have fallen below expectations. In this Chapter, however, researcher’s task is to review the literature of other scholarly works as it relate to NGO’s roles in poverty alleviation.

Desai (2005) has mentioned that NGOs have an important role to play in supporting women, men and households, community groups, civil society groups and expected that they can meet the welfare.

She accounted some role and functions for NGOs, such as counseling and support service, awareness raising and advocacy, legal aid and microfinance. These services help the people to achieve their ability, skill and knowledge, and take control over their own lives and finally become empowered and self-reliance. I agree with the author, because if a project like microfinance is enforced, the living standard of people will be improved. This evidence will be seen in the next chapter.

Strom quits (2002) has also noted three major functions for NGOs such as (service delivery (e.g. relief, welfare, basic skills); educational provision (e.g. basic skills and often critical analysis of social environments); and public policy advocacy as this is the case with NGOs in Sub-Saharan Africa. Baccaro (2001), in his writing depicted how particular NGOs with a definite mission statements can promote the organization and “empowerment” of the poor, particularly poor women, through a combination of micro-credit, awareness-raising, training for group members which is capacity building and other social services, with an aim to reduce poverty among societies.

NGOs general aim is to alleviate poverty through activities that promote capacity building and self-reliance. Langran (2002) has mentioned that NGOs through capacity building help to sustain community development assist government in the provision of basic social amenities. NGOs are often created in order to expand the capacities of people and government there by breaching the gap of poverty (Korten 1990).

NGOs are praised for promoting community self-reliance and empowerment through supporting community-based groups and relying on participatory processes (Korten 1990; Clark 1991; Friedmann 1992; Fowler 1993; Edwards and Hulme 1994; Salamon 1994).In Sub-Saharan Africa for instance where survival for daily bread is a major hurdle, NGOs have been seen as liberators of human suffering the evidence is in Sierra Leone were sixty percent of citizens survival dependent upon donors.

Sustainable development, on the other hand, has emerged over the past few decades as an important paradigm for poverty alleviation.

As Bradshaw and Winn (2000) have noted, sustainability is rooted largely in an environmental approach, particularly in the industrialized countries. But, the goal of sustainable development is to find a balance between three pillars – social, economic and environmental – of communities (Sneddon 2000).

Hibbard and Tang (2004) in their study in Vietnam have noted the importance of NGOs’ roles in sustainable community development. One of the roles was that NGOs balance the social, economic and environmental factors in promoting sustainable development.

Another important role of NGO that they discovered was decentralization of the central government which helps the local communities to acquire more power in order to make their own decisions. As in the case of Sierra Leone where civil society groups and other NGOs like MERLIN, Caritas and CRS, have succeeded in winning bills for decentralization in the Health ministry. But, sometimes the local communities lack specialists to do professional work and resources that are important for the particular projects. In this situation, NGO assists local staff with drafting sustainable development plans that are functional under the umbrella of a central government policy.

Finally, they concluded that poverty alleviation is process-oriented, and it requires extensive community participation and relies on network to share resources, knowledge and expertise. From the literatures, it could be summarized that NGOs play an important function in fighting poverty via promoting sustainable community development.

Sustainable community development emphasizes on a balance between environmental concerns and development objectives, while simultaneously enhancing local social relationships.

Sustainable communities meet the economic needs of their residents, enhance and protect the environment, and promote more human local societies (Bridger and Luloff 1997).

Through the functions of providing microfinance, initiating capacity building and self -reliance, peace building projects, relief services during emergencies, NGOs could bridge the gap of poverty in Sub-Saharan African. Below are the reviews of NGO’s roles, functions and strategies they used to fight poverty.

2.1- NGOs MICROFINANCE ROLE A STRATEGY FOR POVERTY ALLEVIATION

Microfinance is another important sector that NGO’s have fully ultilised in reaching out to the poor. Their roles in this sector, has immensely contributed to alleviating poverty among the poor. The purpose of using microfinance to alleviate poverty is as a result of what role microfinance can play and what impact it created on the beneficiaries. Microfinance has a very important role to play in development according to proponents of microfinance.

In the 1990s, scholars have increasingly referred to microfinance as an effective means of poverty reduction (Rekha 1995; Cerven and Ghazanfar 1999; Pankhurst and Johnston 1999). The microfinance has long existed in Africa, but saw it decline when government established banking institutions took over Oxaal and Baden (1997). The World Bank found, in 1998, that the poorest 48% of Bangladeshi families with access to microcredit from Grameen Bank rose above the poverty line.

In People’s Republic of China (PRC), for instance, microfinance programs have helped lift 150 million people out of poverty since 1990 (UNHDR, 2005). Similarly in, in Ghana, Sierra Leone, Nigeria, Liberia, MkNelly and Dunford (1998) Mansaray (1998-99), found that microcredit beneficiaries increased their income by $36, compared with $18 for nonclients. Clients of microfinance generally shifted from irregular, low-paid daily jobs to more secured employment in India (Simanowitz, 2003) and Bangladesh (Zaman, 2000).

Otero (1999, p.10) illustrates the various ways in which “microfinance, at its core combats poverty”. She states that microfinance creates access to productive capital for the poor, which together with human capital, addressed through education and training, and social capital, achieved through local organization building, enables people to move out of poverty (1999). By providing material capital to a poor person, their sense of dignity is strengthened and this can help to empower the person to participate in the economy and society (Otero, 1999).

The aim of microfinance according to Otero (1999) is not just about providing capital to the poor to combat poverty on an individual level, it also has a role at an institutional level. It seeks to create institutions that deliver financial services to the poor, who are continuously ignored by the formal banking sector.

Mayoux (2000) and Cheston and Khan (2002) have pointed out the importance of microfinance in empowerment, particularly women empowerment. Microfinance is defined as efforts to improve the access to loans and to saving services for poor people (Shreiner2001). UNCDF (2001) states that studies have shown that microfinance plays key roles in development.

It is currently being promoted as a key development strategy for promoting poverty eradication and economic empowerment. It has the potential to effectively address material poverty, the physical deprivation of goods and services and the income to attain them by granting financial services to households who are not supported by the formal banking sector (Sheraton 2004).

Microcredit programs provide small loans and savings opportunities to those who have traditionally been excluded from commercial financial services. As a development inclusion strategy, adopted by NGO’s through the provision of funds to both locally established groups and government and private institutions, microfinance programs emphasize women’s economic contribution as a way to increase overall financial efficiency within national economies. This is because in Sub-Saharan Africa, as whole women are said to be bread winners and care takers of their families.

It should be noted that women are always at mercy regarding social misshapes .According to Cheston and Khan (2002), one of the most popular forms of economic empowerment for women is microfinance, which provides credit for poor women who are usually excluded from formal credit institutions. This issue of gender discrimination in the microfinance sector have been researched and debated by donor agencies, NGOs, feminists, and activists (Johnson and Rogaly 1997; Razavi 1997; Kabeer 1999; Mayoux 2001; Mahmud 2003).

However, underneath these shared concerns lie three fundamentally different approaches to microfinance: financial sustainability, feminist empowerment, and poverty alleviation. All three microfinance approaches have different goals coupled with varied perspectives on how to incorporate gender into microfinance policy and programs (Mayoux 2000).

The microfinance empowers women by putting capital in their hands and allowing them to earn an independent income and contribute financially to their households and communities.

This economic empowerment is expected to generate increased self-esteem, respect, and other forms of empowerment for women beneficiaries.

Some evidence show that microfinance would empower women in some domains such as increased participation in decision making, more equitable status of women in the family and community, increased political power and rights, and increased self-esteem (Cheston and Kuhn

2002).

Well-being as an output of microfinance not only covers the economic indicators, but also other indicators such as community education, environment, recreation and accessibility to social services. It is related to the quality of life (Asnarulkhadi 2002). In order to gain economic sustainability, NGOs through microfinance help the communities to reduce poverty, create jobs, and promote income generation. In the developing countries, sustainability is linked more closely to issues of poverty and the gross inequalities of power and resources (Hamnett and Hassan 2003).

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This is due to the fact that in the Third World countries like sub-Saharan Africa, the ecological system, climate, sometimes conflicts with the socio-economic needs of local people who depend on a local ecosystem for their survival (Nygren 2000). In contrast, in the developed countries, as Bradshaw and Winn (2000) have noted, more priority is given on environmental aspect of sustainable development. Despite the importance attached to microfinance as an effective tool for poverty alleviation, yet it cannot be over ruled that this sector do have many problems. This has even led some scholars to doubt it usefulness, there by suggesting that NGO’s still need to do more to reach out to the poor. Littlefield, Murduch and Hashemi (2003), Simanowitz and Brody (2004) and the IMF (2005) have commented on the critical role of microfinance in achieving the Millennium Development Goals.

Simanowitz and Brody (2004, p.1) state, “Microfinance is a key strategy in reaching the MDGs and in building global financial systems that meet the needs of the most poor people.” Littlefield, Murduch and Hashemi (2003) state “microfinance is a critical contextual factor with strong impact on the achievements of the MDGs…microfinance is unique among development interventions: it can deliver social benefits on an ongoing, permanent basis and on a large scale”. Referring to various case studies, they show how microfinance has played a role in eradicating poverty, promoting education, improving health and empowering women (2003).

However, other scholars are not enthusiastic about the role of microfinance in development because of it lapses, and it is important to realize that microfinance is not a all done strategy when it comes to fighting poverty. Hulme and Mosley (1996), while acknowledging the role microfinance can have in helping to reduce poverty, concluded from their research on microfinance that “most contemporary schemes are less effective than they might be” (1996, p.134). They state that microfinance is not a total solution for poverty-alleviation and that in some cases the poorest people have been made worse-off by microfinance.

Wright (2000,p.6) states that much of the skepticism of MFIs stems from the argument that microfinance projects “fail to reach the poorest, generally have a limited effect on income…drive women into greater dependence on their husbands and fail to provide additional services desperately needed by the poor”. In addition, Wright says that many development practitioners not only find microfinance inadequate, but that it actually diverts funding from “more pressing or important interventions” such as health and education (2000, p.6). As argued by Navajas et al (2000), there is a danger that microfinance may siphon funds from other projects that might help the poor more.

They state that governments and donors should know whether the poor gain more from microfinance, than from more health care or food aid for example. Therefore, there is a need for all involved in microfinance and development to ascertain what exactly has been the impact of microfinance in combating poverty. Considerable debate remains about the effectiveness of microfinance as a tool for directly reducing poverty, and about the characteristics of the people it benefits (Chowdhury, Mosley and Simanowitz, 2004). Sinha (1998) argues that it is notoriously difficult to measure the impact of microfinance programmes on poverty.

2.2. NGOs’ CAPACITY BUILDING ROLE A STRATEGY FOR POVERTY ALLEVIATION

Capacity building is another NGO’s strategy and role that helps to bridge a gap between the haves and have not in society. Capacity building is an approach to development that builds independence. It can be: A ‘means to an end’, where the purpose is for others to take on programs. Is a process, where the capacity building strategies are routinely incorporated as an important element of effective practice (NSW Health 2001).

Langran (2002) has defined capacity building as the ability of one group (NGOs) to strengthen the development abilities of another group (local communities) through education, skill training and organizational support.

Capacity building is a strategy used to develop not a set of pre-determined activities. There is no single way to the build capacity of an individual or groups of individuals. Although experience tells us that there is a need to work across the key action areas, practitioners approach each situation separately to identify pre-existing capacities and develop strategies particular to a program or organization, in its time and place.

Before beginning to build capacity within programs, practitioners need to identify pre-existing capacities such as skills, structures, partnerships and resources. Frankish (2003) has counted a number of dimensions for community capacity including financial capacity (resources, opportunities and knowledge), human resources (skills, motivations, confidence, and relational abilities and trust) and social resources (networks, participation structures, shared trust and bonding).

UNDP (1997-2009) has introduced capacity building as the process by which individuals, groups, and organizations increase their abilities to first, perform core functions, solve problems, define and achieve objectives; and second, understand and deal with their development needs in a broad context and in a sustainable manner.

NGOs, through the provision of education, skills and knowledge, develop the capacity of community towards achieving sustainable development. In fact, NGOs act as a capacity builder to help the communities to develop the resources, building awareness, motivating to participation in project and finally improving the quality of community’s lives.

Inger Ulleberg (2009) has supported the view that NGO’s play important role through the provision of skills for the rural poor. He has maintained that through capacity building, NGO’s have been able to reach the poor, and has contributed to the development of the beneficiaries through skills training, the given of technical advice, exchange of experiences, research and policy advice which is key to today’s development. Through the case study of Afghanistan NGO’s, it suggested that these areas of interest have yielded fruit for the intended beneficiaries. The activities have usually strengthened the skills of individuals, as it was intended but have not always succeeded in improving the effectiveness of the ministries and other organizations where those individuals are working. This according to Kpaka (2007) considered it as a failure on the part of the implementers because of improper allocation of stratetigies and argues that they failed because of poor planning and poor implementation strategy.

2.3.NGO’s ROLES OF SELF-RELIANCE AND SUSTAINABLE COMMUNITY DEVELOPMENT A STRATEGY FOR POVERTY ALLEVIATION

Self-reliance is another strategy that affects sustainable community development. Effective community development sits on the foundation of self-reliance. The concept of self-reliance is strategically situated within the essence of community development and is related to other concepts like mutual-help, self-help, participation of the indigenous people and rural progress. Self-reliance encourages the necessity for people to use local initiatives, their abilities and their own possessions to improve their condition. Fonchingong and Fonjong (2002) have pointed out that self-reliance is increasingly being adopted as modus operandi for community development.

Therefore, to attain self-reliance, NGOs and community groups must discover their own potential and look for ways to innovatively develop such discovered potential to use as sources of wealth for the development of the community (Ife and Tesoriero 2006). Motivating and mobilizing people to be self-reliant and to participate in development activities become an important objective of the NGOs.

According to Kelly (1992), self-reliance means that the people rely on their own resources and are independent of funds sourced outside the community. Self-reliant strategy relies on the willingness and ability of the local people to depend on their own available resources and technology which they can control and manage.

A self-reliant strategy requires the optional use of all available human, natural and technological resources (Agere 1982). Although dependence on the state maybe desirable in the short term, it should not be a long term objective, because the aim of the community development must ultimately be self-reliance. Mansaray (1982) has maintained that reliance on external resources will lead to the loss of autonomy and independence of the community, therefore communities should be bound to carry out autonomous programmes. This according to him, autonomous communities can flourish only in the absence of such external dependency.

According to Korten (1990), the second strategy of the NGOs focuses on developing the capacities of the people to better meet their own needs through self-reliant local action. In the second generation strategy, Korten (1990) mentioned that the local inertia is the heart of problem in a village or community. There is a potential energy in a community but remains inactive because of the inertia of tradition, isolation and lack of education.

But this unwillingness on the part of the local beneficiaries can be broken through the intervention of an outside change agent, who supposedly are to be NGOs, whose role is to who help the community realize its potentials through education, organization, consciousness raising, small loans and the introduction of simple new technologies. It is the stress on local self-reliance, with the intent that benefits will be sustained by community self-help action beyond the period of NGO assistance (Korten 1990). Therefore, NGOs, through the strategy of self-reliance, has facilitated sustainable development of the community through its participation in the community actives, project sponsorship, monitoring and evaluation processes.

2.4. NGO’S PEACE BUILDING ROLE A STRATEGY FOR POVERTY FOR POVERTY ALLEVIATION

NGO’s roles are extended to peace building in Africa. The crucial role played by NGO’s in the restoration of peace in war affected zones, is one seen as important. Many African countries have witnessed war and are still going through the trauma of war. Countries like Sierra Leone, Liberia, Angola, Somalia and many are witnesses of NGO’s intervention in peace building. From the evidence of the current conflict in Afghanistan, Richard Barajas, Rachel Howard, Andrew Miner Jeff Sartin, Karina Silver (2000), have maintained that NGO’s can play peace building roles. The presence of NGO’s in Afghanistan according to them have led to the restoration of fair peace as their propagation of the human rights law, and their involvement in the disarmament, demobilization and reintegration programmes, is fostering cooperation among the warlords. I am in total agreement with them. The role of Peace Wing in Sierra Leone, for instance, justify the effectiveness of peace building NGO’s through their organizational strategies which was able to bring the rebels out of the bush and negotiating between the government and war factions to negotiate a peace talk rather using guns and bullets to cease war.

2.5. NGO’s HUMANITARIAN ASSISTANCE/RELIEF SERVICES ROLES FOR POVERTY ALLEVIATION

The provision of food and non-food items during emergency periods and war time and other disasters periods, often see NGOs functions as important one. The provision of these items is short run but very significance in alleviating poverty. According to Kpaka (2007), humanitarian assistance is a fastest means to fight poverty and ensure sustainability in today’s society. During emergency period, governments are unable to settle their displaced and refugee population, because of inadequacies of resources. As a result of the shortcoming of the government, the issue of NGO’s influx into a country becomes unquestionable Kpaka (2007). Conflict and other disasters that occurred in society always left a strong poverty bench mark. During these conflicting periods, lives, properties, and physical infrastructures, diseases, and other hazardous issues are left as strong legacy in our society. To remedy these legacies, Humanitarian NGOs have different strategies to implement their relief programmes.

Generally, the roles of NGO’s are still debatable as many sees their roles as positive and others sees these roles as not proper.

It has been noted that, NGO contributions in poverty reduction are limited. Edwards & Hulme (1995:6) stated that it is difficult to find general evidence that NGOs are close to the poor. There is growing evidence that in terms of poverty reduction, NGOs do not perform as effectively as had been usually assumed by many agencies. More specific evidence is provided by Riddell and Robinson (1995) who conducted a case study on sixteen NGOs undertaken in four countries in Asia and Africa.

They found that while NGO projects reach the poor people, they tend not to reach down to the very poorest. NGO projects also tend to be small scale. The total numbers assisted are also small. Furthermore, it is also rare for NGO projects to be financially self sufficient. Finally, although NGOs execute a number of very imaginative projects, many of them appear to be unwilling to innovate in certain areas or activities. Therefore, because of these limitations, the roles of NGOs in alleviating poverty cannot be exaggerated.

2.6. CONCLUTION

The literature established the important roles played by of NGOs in the fight against poverty through micro-finance, capacity building, self-reliance, peace building, sustainable community development, and empowerment especially women’s empowerment all aiming at poverty alleviation. NGOs through the micro-finance help members of community to access jobs, income-generation and improve economic situation there by alleviating poverty from the poor. And then they would become empowered economically. NGO’s developed the capacities of community such as skills, abilities, knowledge, assets and motivates the community to participate in the project to improve the quality of their lives. NGOs act as capacity builders that help the community to achieve the empowerment particularly individual empowerment.

Since the philosophy of community development is independent from any outside agents, thus the community must rely on their own resources. NGO’s do assist the community to discover their potentials and also mobilize community to be self-reliant. Therefore, the final outcome of community development is the independence of the community from external agents in formulating its agenda and managing its affairs. This process involves capacity building, where people get involved in human capital training, transferring of authority from donor to recipient and receive supports from stakeholders (World Bank group 1999). When people become fully empowered, they are able to contribute toward sustainable development (Lyons et al. 2001).

Therefore, NGOs through some programs and functions, such as microfinance, capacity building and self-reliance help community to be empowered, and finally contribute towards sustainable community development.

However, though many don’t see a need for NGO’s in the fight against poverty alleviation in Sub-Saharan Africa, I strongly believed that presence in black Africa is importance. Their strategies and approaches they use to fight this disease is one that should not be neglected.

Having looked into all the literature NGO’s, in the next chapter, researcher will be discussing the strategies adopted by some NGO’s in the fight against poverty.

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