SFD and its fight against poverty [Archives:2007/1051/Business & Economy]

May 17 2007

Since its establishment ten years ago, the Social Fund for Development has helped over 6000 families escape the poverty trap, selected from the most-deprived 10 percent of the society, the social fund has helped those create small and tiny enterprises through teaching them the entrepreneurship and business skills in order to undertake value-added activity and contribut to the national economy.

Investing close to half a billion US dollars in these 6000 families, the social fund for development had focused on creating services and business activities that are most vital to the local communities through these projects, including education and training-related projects (54%); water and health-related projects (18.5 %); roads and transportation (7.6%), while the reminder went to a wide spectrum of other projects deemed necessary.

All projects were designed in order to help the development of the one-third of the society that is most underprivileged, either directly through providing funding and employment, or either indirectly through creating businesses which provide necessary services for this segment. In fact, 42 percent of the fund's resources are directed towards the one-tenth of the society that is least privileged and suffers from the highest levels of poverty in the country.

Empirical research of the projects administered by the fund has indicated that the positive impact exceeds the designated objectives to creating a spill-over effect, hereby spreading the understanding of participatory enterprising, cooperative societies, and also the concepts of transparency as well as good governance. As such, this has enhanced the value of human capital within the localities in which the fund's programs are being implemented.

Additionally, the fund's programs also aimed at increasing the participation of women in order to boost their role in the family, society, economy, and shrink the existing gender gap. It has also adopted a strategy of positive discrimination for girls especially in education.

SFD & Microfinance

Another effective program adopted by the fund was Micro-financing, where this program has had immense annual growth rates reaching to 50% every year, increasing rapidly to involve over 33,000 people within the program, out of which 86% are women. The Micro-financing project has had great success in establishing reliable business practices within the participants, such as basics of accounting, transparency, and good business conduct, as well as teaching them how to formulate a business strategy and how to plan their work.

The results of this program has shown that it has achieved unprecedented success in the fight against poverty, indicating that 24,000 of those involved are among the one-third of the society which is the least privileged, and are slowly escaping the poverty trap, however, the results also indicate that there is a great room for improvement and that there is a huge potential for micro-financing activities, especially since the loans given to such projects are repaid within the timeframe in over 90% of the cases, allowing for circulation of the money and the start-up of other similar tiny businesses through microfinance.