Betsy Nolan

Econ 101: Three different ways to lift girls out of poverty

New projects that teach young women how to start a business, hold a bank account, and apply for financial aid can help to give them better futures and avoid the hallmarks of poverty — poor health care, forced marriage, and early childbirth.

And Kathy Calvin, CEO of the United Nations Foundation, says that helping girls out of poverty will have a ripple effect that extends to fighting poverty for more than just themselves.

“Girls are one of the most potent weapons against poverty. A healthy, educated, empowered adolescent girl has the unique potential to break the cycle of poverty for herself, her family and her country.”

Aid organizations have found that giving girls basic financial skills helps them to escape poverty. Simply learning about personal finance — saving money, pricing goods – gives young women knowledge that can help them build a more secure and independent life.

But aid programs come in many different shapes and sizes. Here are three that take different routes to helping girls rise out of poverty and into independent, fulfilling lives, while also stoking the fire of economic growth.

Wedu works with adolescent girls from low-income countries in Southeast Asia to ensure they enter college with the skill sets necessary to succeed. The organization, started by two recent graduates of the London School of Economics, helps students understand financial aid. It also encourages people to donate, then take an active role in mentoring and selecting students. Students receive microfinancing instead of scholarships, making the donor-student relationship more like an investment, where graduates repay their loans from a percentage of their incomes for 10 years and help to fund expansion of the program. Meanwhile, donors have a stake in helping those they selected for the program to succeed.

In Gap’s Personal Advancement and Career Enhancement (P.A.C.E.) program, female employees of the garment industry in Bangladesh, Cambodia, China, India, Indonesia, Sri Lanka, and Vietnam receive training to advance their potential in the workplace. The training includes financial literacy, problem solving and gender equality, as well as technical training in their home factories. The women who complete the program are more inclined to save money, according to the International Center for Research on Women, who report a 70 percent increase in regular savings by women who completed the program in India. Participants also open more bank accounts, and start more of their own businesses. Even more encouraging, graduates are more likely to mentor their peers and five times more likely to receive promotions at work. More than 17,000 women have received the training so far.

SEWA Bharat’s vocational school in Delhi targets girls from poor neighborhoods nearby, many who have dropped out of traditional schooling to help their families at home. The program readies girls to participate in the formal economy with financial education in accounting, computer applications and banking. SEWA Bharat, a federation founded in 1972 to support and protect poor, self-employed women in India’s informal economy, also assists the girls with job placement and helps new entrepreneurs get their nascent businesses established in the market.

Adolescent girls may be the next key to fighting poverty, according to the Girl Declaration, which launched last week and calls for a focus on girls in the post-Millenium Development Goals era.

“We have listened to the voices of girls and now we are asking leaders in every country around the world to do the same.” says one of the declaration’s coordinators, Maria Eitel, CEO of the Nike Foundation. “The Girl Declaration is based on overwhelming evidence — that girls not only face appalling discrimination in much of the world, but they are also the most powerful potential drivers of change in their families, communities and countries.”

Betsy Nolan is currently a contributor to Mercy Corps’ Global Envision blog and a researcher for Portland State University studying the effectiveness of social programs and innovations in social work.