JH
Answered
Describe the three foreign aid methods for delivering funds directly to poor individuals and how effective they have been.
On Jun 29, 2024
Microcredit is small loans that are provided to the poor in order to help them start businesses. The loans are almost always paid back, but, on average, households and individuals receiving the funds do no better than nonrecipients on economic, health, or social outcomes.Conditional cash transfers are payments made directly to poor individuals or families if they send their children to school and participate in preventive health programs. Some conditional cash transfer programs have been found to improve school enrollment, health, and nutrition. However, the results do not indicate the household will be moved out of poverty, nor do school test scores increase for the children.Unconditional cash transfers hand cash directly to poor adults with no conditions attached. The assumption is that these households will use the money to buy tools, education, and business equipment, and early results show this to be true. Because unconditional cash transfer payments are quite new, it is not yet clear whether granting cash unconditionally works better than the other two programs.