Covid and rising food prices push quarter of a billion more people into extreme poverty
The programme which transforms the lives of families in extreme poverty through entrepreneurship has made solid progress with 26 new enterprises set up.
The new ventures established throughout 2022 have enabled the charity - with its partner in India, Learning Links Foundation (LLF) - to reach an overall total of 86 new businesses established.
In the most recent batch of businesses, five out of the six beneficiaries are illiterate, and more than half the group are supporting households of six people or more. Their businesses sell warm clothes, school bags, scarves/hosiery items, cosmetics, as well as lemon and masala teas. One of the entrepreneurs has set up a tailoring enterprise.
Funding for Project Unnati began at the end of 2019 with the first group of eight entrepreneurs. The number of beneficiaries has steadily grown since then, despite major disruption in 2020 and 2021 due to Covid.
Jonathan Hill, Founder of The Road to Parity, says: “As most of the world started to bounce back after Covid, we made steady progress in 2022. International payment issues prevented us from reaching the target of 90 businesses in total, but this will soon be reached as we continue to fund more life-changing opportunities.”
All 86 businesses established under Project Unnati so far have been set up in the slums of Delhi. Many of the entrepreneurs have set up street stalls, and home-based tailoring is another popular trade. Some of the less common businesses include an ironing enterprise, repair businesses for bicycles and air-conditioning and a welding venture.
The project was named Unnati (meaning progress) after an early beneficiary said she felt her new business would bring prosperity to her family after enduring extreme poverty.
“It's heart-warming to see that little twinkle in people’s eyes when they do their first sale or business transaction,” says Rashmi Mishra, who has helped manage Project Unnati within India since the start. “It's one thing to help people overcome their challenges but seeing them regaining their confidence and restoring their faith and trust in humanity is overwhelming.”
Covid and extreme poverty
Covid-19 has damaged economies across the world. It has also worsened the plight of those in extreme poverty and increased the numbers who fall into this category of people who live on less than $1.90 per day.
Global poverty had been in decline before Covid struck. According to the U.S-based Brookings Institution, the number of people suffering extreme poverty had dropped from 1.9 billion in 1990 to 648 million in 2019 – and was on course to fall further to 537 million by 2030. However, the pandemic has caused the number to increase for the first time in over two decades.
Oxfam International reported last year that the combination of Covid and rising food prices will push 263 million more people into extreme poverty – equivalent to the populations of the UK, France, Germany, and Spain combined.
Project Unnati, which started funding businesses in the months before Covid struck, has also seen business casualties along the way.
Out of the 86 businesses supported so far, 72 are still trading or 84%. None have failed since Covid restrictions were lifted in India. However, the challenges beneficiaries face on a personal level go far deeper than the impact of the virus.
In addition to being in extreme poverty, many of the beneficiaries are illiterate, while others have been victims of domestic violence, or are mentally and physically challenged.
How extreme poverty feels
In a 2015 blog for the World Economic Forum, entitled ‘What does extreme poverty really feel like?’ Gisela Solymos wrote: “People in poverty suffer from pain. It attacks a person not only materially but also morally, eating away at one’s dignity and driving one into total despair.”
In 2000, The World Bank stated there are three different types of pain caused by poverty.
Jonathan says: “Given the complexities surrounding poverty, and the additional agony of Covid, it is truly remarkable that any of these businesses have succeeded, let alone 84%. The people we help are among the poorest on the planet. I have the greatest respect for their tenacity to make these businesses work against the odds.”
Rashmi says: “Over the years, we have seen the people who have benefitted under Project Unnati becoming the inspiration and motivation to their friends and family.”
She adds: “At LLF, we have always believed in the concept of life-long learning and when it comes to learning by doing then the outcomes are astounding.”
Mohd. Sarfaraz’s story
Mohd. Sarfaraz comes from a background of extreme poverty.
Before Covid struck, the 26-year-old worked in an air conditioning repair shop, and while he could sometimes earn 5,000 Indian Rupees a month, he was at the mercy of a boss who made arbitrary salary reductions.
The pandemic made the situation even more desperate with increasingly meagre wages to support him and his parents.
The Project Unnati outreach team came across Mohd. Sarfaraz - and after learning of his AC maintenance skills, offered him an escape route.
He jumped at the opportunity and received support to buy AC cleaning equipment. His little business is taking off and he now makes an average profit of around 9,500 Indian Rupees per month (approx. £95). This is more reliable income and almost double what he earned before.
One day Mohd. Sarfaraz hopes to have his own shop and team of staff. “I’m so grateful for the opportunity I’ve been given. The extra money has enabled me to purchase medicine for my elderly parents. And I’ve been able to get new clothes for them.”
Farida Khatoon’s story
Farida comes from a very poor family where six people had been trying to survive on £8.32 each per month. Her husband’s meagre labouring salary was trapping them in financial misery.
Farida is illiterate but knew how to sew and thought she might be able to bring some more money into the house by doing some home-based tailoring.
After discussing her idea with the Project Unnati outreach team, the 20-year-old was supported with a new business kit. Farida is now earning up to 5,000 Rupees a month, which has doubled the household income. “I’m doing much better now. I’m so happy,” she says. “I’ve been able to buy some tailoring material to help expand the business.”