Why are social safety net programmes so crucial?

Nawshad Ahmed

I have been asked by several close friends recently, why we need social protection measures to address poverty in Bangladesh—a country which has the world’s largest microcredit programme. One might ask: is it because the microcredit programme is not fulfilling its promise of alleviating poverty and social protection is therefore going to replace it?

Let me start by briefly explaining the major difference between the two and what these are supposed to deliver. Through microcredit, small amounts of loan are given to poor women and men to help them become self-employed or initiate small-scale income generating activities that would help them come out of poverty. This poor segment of the population is unable to access credit from the formal financial sector due to their inability to arrange collateral. Most microcredit programmes adopt group centred lending approach and they are run by non-government organisations. Bangladesh pioneered microcredit programme since the late seventies which has gained popularity now in many other developing Asian and African countries.

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