WDF’s involvement in addressing the vicious cycle of poverty
In economics the cycle of poverty becomes one of the issues or measures by which poverty, once started, is likely to continue unless there is outside intervention. The cycle of poverty has been defined as a phenomenon where poor families become impoverished for generations, Such families in most cases are indebted, and have either limited or no resources. There are many disadvantages that collectively work in a rotating process making it virtually impossible for individuals to break the cycle.
This occurs when poor people do not have the resources necessary to get out of poverty, such as human, physical, financial or knowledge. In other words, impoverished individuals also known as economically inactive poor, do not have access to economic and social resources as a result of their poverty. The crucial aspect is the lack of assets that may increase the ongoing poverty. This could mean that the poor remain poor throughout their lives. This cycle has also been referred to as a "pattern" of behaviors and situations which cannot easily be changed. The poverty cycle can also be called as "development trap" when it is applied to countries.
At the inception, when Janashakthi premeditated it’s concept, the theoretical perspective of Regnar Nurkse (1907 – 2007) which had been presented in 1953 was put into operation. Regnar Nurkse pointed out that economy of poor countries has affected by the vicious cycle of poverty. We realized that the country based theory of poverty cycle could be applied for even for the betterment of a family.
In this endeavor, Janashakthi followed John Menady Cains’ development formula too, to intervene the cycle of poverty. The formula highlighted by Cains showed that the income derived by an individual is equal to the total of his expenses on consumption and the savings. Similarly, the savings can be equal to his investment. This theory can be applicable merely for an individual, yet, it can be evolved for an institution or a country as well. Thus, reaching the poor, mobilization, promoting savings, releasing loans in order of scaled up investment, thereby, the increased productivity followed by the broadened income, scaled up savings which continues with increased quantums enabling the family to cross over the prolonged poverty.