This phenomenon is represented graphically by the lower convex section in a graph of present income versus future income. For 10 points each:
[10m] Name this phenomenon in which very-low-income households do not have enough capital to improve future earnings.
ANSWER: poverty trap [accept cycle of poverty]
[10e] This general program of credit and savings aims to alleviate the poverty trap by allowing poor people access to small-scale financial institutions, such as Grameen Bank.
ANSWER: microfinance [accept microcredit, microsavings, microlending, or microloans]
[10h] These reciprocal financial associations, particularly common in Africa, operate on a model where members donate a fixed amount on a regular basis and one member of the group receives all of the donations at each meeting. Microfinance institutions often replicate these associations’ group lending and meeting arrangements.
ANSWER: ROSCAs [or rotating savings credit associations; accept merry-go-rounds or tontines]
<Ryan Rosenberg, Social Science>