STEM Education

Microfinance A Poverty Fighting Tool

45 minutes


In September 2000 society’s attention was drawn to certain social and economic issues impacting us on a global scale through the development of the United Nations’ Millennium Goals (MDG). The purpose of the Millennium Development Goals is to eradicate poverty, hunger, disease, gender inequality, child mortality, illiteracy, and environmental damage. Although these issues have been addressed and are, indeed, evident in developing nations, we can invest time in encouraging entrepreneurship and self-sufficiency through a long-term commitment to providing the skills and resources necessary to sustain life. Did you know that 925 million will suffer from chronic hunger this year? Did you know that females constitute 53% of children that are not in school? Did you know malaria kills a child every 45 seconds? Did you know that the official development assistance to developing nations is currently around $126 billion which is still not enough? It is our social responsibility to make a difference. The goal of this lesson plan is to provide students with a broad overview of poverty and ways in which it can be alleviated.


Students will be able to:
• Define microfinance, globalization, poverty
• Recognize the interconnectedness of the 3 terms aforementioned
• Understand the causes of poverty
• Explain the usefulness of microfinance as a tool in poverty eradication

Background and Information:

Poverty- Condition where people's basic needs for food, clothing, and shelter are not being met.
Globalization- The worldwide movement toward economic, financial, trade, and communications integration(implies the opening of local and nationalistic perspectives to a broader outlook of an interconnected and interdependent world)
Microfinance- A small financial loan made to poverty-stricken individuals seeking to start their own business. This type of loan typically does not exceed a couple hundred dollars, so an impoverished individual cannot solely depend on this type of loan to fund their business.
Absolute poverty-occurs when people cannot obtain adequate resources (measured in terms of calories or nutrition) to support a minimum level of physical health. Absolute poverty means about the same everywhere, and can be eradicated as demonstrated by some countries.
Relative poverty-occurs when people do not enjoy a certain minimum level of living standards as determined by a government (and enjoyed by the bulk of the population) that vary from country to country, sometimes within the same country. Relative poverty occurs everywhere, is said to be increasing, and may never be eradicated.
Poverty line- Standard family income threshold (set by each state and revised occasionally) below which the family is officially classified as poor and entitled to welfare assistance.


45 minutes


Fast Facts About Poverty and Quick Actions to Alleviate it
Poverty in Numbers

Common Core Standards:

Integrate quantitative or technical analysis (e.g., charts, research data) with qualitative analysis in print or digital text.
Determine the central ideas or information of a primary or secondary source; provide an accurate summary that makes clear the relationships among the key details and ideas.
Determine the meaning of words and phrases as they are used in a text, including analyzing how an author uses and refines the meaning of a key term over the course of a text
Recognize the purposes of and differences among sample surveys, experiments, and observational studies; explain how randomization relates to each.

AFS Educational Goals:

Global Realm
• To develop an increased curiosity and concern about world affairs, to develop a sustained commitment to obtaining information from many sources and seek out perspectives from other cultures in understanding world situations and problems.
• To have an increasing knowledge of a range of world issues that affect people and divide us, such as human rights, environmental issues, and poverty.
• To understand the interdependence of the global community and have an increased awareness of the larger impact that their personal choices and actions have in other parts of the world.
• To gain in competence in understanding the causes of conflict between cultures.
• To be willing and ready to work with others to help build peace, to improve world conditions and to commit to actions that will bring about a just and peaceful world.
• To engage in voluntary service toward the improvement of the local and global communities.
Interpersonal Realm
• To listen and be mindful of the needs of other people and to use different perspectives in approaching problems and everyday situations.
• To have a deeper concern for and sensitivity to others and expand their capacity to perceive and respond to the values, feelings, and realities of others.


• Create a chart comparing poverty in the United States to three other countries (explain that these terms are all relative, since many so-called “less industrialized nations” are actually in the process of substantial economic growth, such as Brazil, who is part of the G20)
o Select one First World country “refers to so called developed, capitalist, industrial countries, roughly, a bloc of countries aligned with the United States after World War II, with more or less common political and economic interests: North America, Western Europe, Japan and Australia”(
o Select one Second World “refers to the former communist-socialist, industrial states, formerly the Eastern bloc, the territory and sphere of influence of the Union of Soviet Socialists Republic today: Russia, Eastern Europe and some of the Turk States as well as China” (
• Select one Third World “originally coined in times of the Cold War to distinguish those nations that are neither aligned with the West (NATO) nor with the East, the Communist bloc. Today the term is often used to describe the developing countries of Africa, Asia, Latin America and Oceania” ( students into three groups, assigning them as follows: First World Country, Second World Country, Third World Country
• Case Study: What problems present themselves?
Extension Activities
• Research global organizations that specialize in programs aimed at alleviating poverty
• Get Involved in your local community through volunteering or promoting awareness through social media, etc
Discussion Questions:
1. How is poverty defined in a
a. First World Country?
b. Second World Country?
c. Third World Nation?
2. What factors contribute to poverty in the selected countries from the First, Second, Third World Countries?
3. What are some major similarities and differences of how poverty is defined in a First World Country, Second World Country and Third World Country?
4. Describe the role of microfinance in assisting to alleviate poverty in developing countries.

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