As per the latest poverty estimates, 24% of Pakistan’s population lives below the national poverty line; which includes 31% in rural areas and 13% in urban areas1 . Further, 38.8% of the national population is poor based on the multidimensional poverty index (MPI); 54.6% in rural areas and 9.4% in urban areas in 2018.
There are multiple factors pushing people below poverty line in Pakistan. Unemployment is a major factor. With unemployment rate up to 10%, unemployed youth are unable to meet basic needs of life. Unemployment is rampant not only among the unskilled labor but also among the educated youth, many of them with professional skills. The unemployment rate in Pakistan has surged at a time when major portion of the population belongs to the working age. The country’s technical vocational education and training system lacks meaningful participation of stakeholders, and not geared to meet the market needs.
Investment in human capital formation means investment in education and health sectors. Human development provides a wide range of choices and opportunities to the people for employment, nutrition, education and health care. Sustainable growth and poverty reduction objectives are concomitantly linked to significant investment in human capital.
Another main factor of poverty is the existence of huge income inequalities among top and bottom 20% of population. As per UNDP report on Human Development, On account of Inequality adjusted Human Development Index (IHDI), Pakistan did not perform well as with an IHDI of 0.386 in 2018, Pakistan suffered a loss of 31.1% due to inequality in the distribution of HDI dimension indices.
This project aims at enabling poverty struck families to improve their monthly household income by providing the micro-entrepreneur with support in terms of goods, services and/or advisory that would facilitate in creating linkages and adoption to new methods to compete locally and even internationally. The aim of the project is to enable micro entrepreneurs of all age groups to earn a decent income with dignity. Moreover, the program will also help immensely to build the capacity of the business units so they are able to grow their businesses by giving employment to unemployed in their communities. SDO has supported 47 business units (provided homes jobs for women and jobs for poor families)since launch of the program in 2019 and this year it aims to facilitate up to 300 units in the locations mentioned above to play its role in reducing poverty in Pakistan