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Exiting Poverty Through Self-Employment: The Grameen Model And Rotating Credit Associations As Alternative Strategies

Author

Listed:
  • IVAN LIGHT

    (Professor Emeritus of Sociology, University of California, Los Angeles, USA)

Abstract

Self-employment in the informal sector keeps poor people alive, but it rarely enables them to exit poverty. To exit poverty through self-employment, poor people require monetary and non-monetary resources which they overwhelmingly lack. To escape this dilemma, the owners of survivalist business firms need to band together in order to assemble a minimal resource base on the strength of which they can together upgrade their partnership. Because resources are scarce in poverty populations, this task is exceptionally hard to accomplish. Rotating credit and savings associations (ROSCAs) can enable individuals to exit poverty through self-employment, but ROSCAs only work in the most-resourced, upper tier of a poverty population. In the lower tier, Grameen model banks inject organizational, educational, and financial resources that enable impoverished individuals to exit poverty by upgrading a survivalist business.

Suggested Citation

  • Ivan Light, 2021. "Exiting Poverty Through Self-Employment: The Grameen Model And Rotating Credit Associations As Alternative Strategies," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 26(02), pages 1-17, June.
    • Handle: RePEc:wsi:jdexxx:v:26:y:2021:i:02:n:s1084946721500126
    DOI: 10.1142/S1084946721500126
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