Small Money Big Impact

CHAPTER 1Introduction

Worldwide, almost 1 billion people have to live on less than $1.9 a day.

World Bank¹

More than half of the world's population lives on an annual income of less than $2500 – the equivalent of about $7 a day. Africa, Latin America and South Asia account for the largest part of the population living below the respective national poverty line.

In the past, the limited offer of financial services has been one of the main pitfalls. There was a lack of financial infrastructure and products tailored to the needs of people and households living on a low income.

1.1 FIGHTING POVERTY

While less than 1.5 per cent of the world's population live on an annual income of over $20,000, more than half of the people around the world have to get by on less than $2500 a year (see Figure 1.1), the equivalent of no more than $7 a day. More than 2.5 billion people live on as little as $4 or less per day.² Such living conditions are officially referred to as poverty. The World Bank uses the term “extreme poverty” in cases falling below the $1.9 a day line – almost 1 billion worldwide are constrained to a life on as little as that.³

FIGURE 1.1 Economic Pyramid

Data Source: Prahalad and Hart (2002); World Bank (2001), adjusted according to World Bank (2016)

The pyramid shows ...