Frequently Asked Questions

1. What is extreme poverty?
2. What is microfinance?
3. How does microfinance help the poor?
4. Why does microfinance target women?
5. What is a microfinance institution?
6. What is the Alliance of Students Against Poverty (ASAP)
7. Is ASAP a 501(c)(3) non-profit organization?
8. Why students?
9. Who is behind ASAP?
10. How can I get involved with ASAP?
11. Why $1/day?
12. Where does my $1/day go?

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1. What is extreme poverty?

Extreme poverty is the most severe state of poverty, where people cannot meet basic needs for survival. They are chronically hungry, unable to access healthcare, lack the amenities of safe drinking water and sanitation, cannot afford education for some or all of the children, and perhaps lack rudimentary shelter—a roof to keep the rain out of the hut, a chimney to remove smoke from the cook stove—and basic articles of clothing, such as shoes. Overall, 1.2 billion, or one sixth of humanity live in extreme poverty throughout the world.¹

2. What is microfinance?

Microfinance is the supply of loans, savings, and other basic financial services to the poor. People living in poverty, like everyone else, need a diverse range of financial instruments to run their businesses, build assets, stabilize consumption, and shield themselves against risks. Financial services needed by the poor include working capital loans, consumer credit, savings, pensions, insurance, and money transfer services.²

3. How does microfinance help the poor?

Poor people, with access to savings, credit, insurance, and other financial services, are more resilient and better able to cope with the everyday crises they face. Even the most rigorous econometric studies have proven that microfinance can smooth consumption levels and significantly reduce the need to sell assets to meet basic needs. With access to microinsurance, poor people can cope with sudden increased expenses associated with death, serious illness, and loss of assets.

Access to credit allows poor people to take advantage of economic opportunities. While increased earnings are by no means automatic, clients have overwhelmingly demonstrated that reliable sources of credit provide a fundamental basis for planning and expanding business activities. Many studies show that clients who join and stay in programs have better economic conditions than non-clients, suggesting that programs contribute to these improvements. A few studies have also shown that over a long period of time many clients do actually graduate out of poverty.

By reducing vulnerability and increasing earnings and savings, financial services allow poor households to make the transformation from "every-day survival" to "planning for the future." Households are able to send more children to school for longer periods and to make greater investments in their children's education. Increased earnings from financial services lead to better nutrition and better living conditions, which translates into a lower incidence of illness. Increased earnings also mean that clients may seek out and pay for health care services when needed, rather than go without or wait until their health seriously deteriorates.³

4. Why does microfinance target women?

Microfinance programs have generally targeted poor women. By providing access to financial services only through women—making women responsible for loans, ensuring repayment through women, maintaining savings accounts for women, providing insurance coverage through women—microfinance programs send a strong message to households as well as to communities. Many qualitative and quantitative studies have documented how access to financial services has improved the status of women within the family and the community. Women have become more assertive and confident. In regions where women's mobility is strictly regulated, women have become more visible and are better able to negotiate the public sphere. Women own assets, including land and housing, and play a stronger role in decision making. In some programs that have been active over many years, there are even reports of declining levels of violence against women.4

5. What is a microfinance institution?

A microfinance institution (MFI) is an organization that provides financial services to the poor. This very broad definition includes a wide range of providers that vary in their legal structure, mission, methodology, and sustainability. However, all share the common characteristic of providing financial services to a clientele poorer and more vulnerable than traditional bank clients. An MFI can be broadly defined as any organization—credit union, down-scaled commercial bank, financial NGO, or credit cooperative—that provides financial services for the poor.5

6. What is the Alliance of Students Against Poverty (ASAP)?

The Alliance of Students Against Poverty (ASAP) is a campaign to abolish extreme poverty worldwide by the year 2025.  As a non-profit organization, it seeks to inspire today's Generation Y to assist in this effort.  It calls upon the youth of this world to take the lead in raising awareness of the issue of those living on less than $1 a day and to spread ASAP’s message, which is this:

1. Over 1/6 of humanity lives in extreme poverty or on less than $1/day. 
   
2. The practical solutions and interventions needed to eradicate extreme poverty by the year 2025 are currently available.
   
3. $1/day donation over the course of one year will start one family on the path out of extreme poverty.

7. Is ASAP a 501(c)(3) non-profit organization?

8. Why students?

Students have many of the attitudes their elders once had but lost—idealism, optimism, belief in a better world, impatience with social injustice, a healthy disrespect for the promises of politicians and in general a higher level of outrage. Students also bring special advantages to the profession of social activism.

Unmarried and asset-poor, they are relatively fearless. Having not yet launched their careers, students enthusiastically welcome internship and other volunteer job opportunities that help them build a resume or identify promising career paths.

As researchers, students often show more objectivity and independence than paid staff or consultants. Furthermore, students not only bring to these internships state-of-the-art classroom training but also excellent skill sets in information technology, modern internet communications, statistics and social science research. Finally, students usually have more energy, stamina, focus, enthusiasm and passion than their older counterparts.

9. Who is behind ASAP?

ASAP was co-founded by John Hatch and Patrick Crompton.  Previous to starting ASAP, John and Patrick led the research team of FINCA International, of which John is the Founder.  It was through their teaching and research experiences that John and Patrick came to understand the enormous potential power of youth and students in the fight against global poverty. 

Alliance of Students Against Poverty (ASAP) was created for the purpose of giving motivated and socially conscious students the opportunity to see severe poverty first-hand. This experience would cause an internal transformational process--a "fire in the belly"—that would create a desire within to do everything in their power to mobilize society's resources to eradicate poverty.

10. How can I get involved with ASAP?

There are numerous ways you can get involved.  First of all, you can become a member of ASAP and pledge $1/day for those living on less than $1/day.  If you are a student, ASAP provides numerous opportunities to be involved and make a difference, including: overseas internships, fellowships, youth-led development projects and much more.  Click here to learn more.

11. Why $1/day?

The world is currently plagued by the inequity between rich and poor, between excessive consumption and excessive poverty, between too much and too little. Accordingly, a core concept underlying the campaign is that the ASAP $1/day pledge not be simply a request for money but a commitment to save—to reduce one’s current consumption by $1/day (or $7/week) and to direct that savings into an investment that helps others escape life-threatening poverty.

This ASAP savings strategy offers a mechanism for creating an immense wealth transfer from rich to poor that is financed not by a tax but by asking the affluent to shrink their current consumption by a trivial $1/day. This minimalist reduction is well within the means of virtually every American, even children.

And how will it be accomplished? There are thousands of possibilities—all of which can actually benefit the donor as well as the poor. For some donors it will mean drinking one glass of water per day instead of a soft drink, taking their own lunch to work instead of eating out or eliminating two custom coffee drinks per week.   For others it will mean trimming 50 miles of driving per week, perhaps by designating one day for using a bike, car-pool,  metro or public transportation to get to work or to class.

Furthermore, the challenge of reduced consumption helps all of us learn the difference between needs versus wants, between excess versus sufficiency, between spending unconsciously versus consciously. It helps us learn that each dollar we spend is a vote, and we use these votes to elect the kind of lifestyle we want for ourselves.

12. Where does my $1/day go?

From each $1 donated, $.70 goes to organizations that are reaching and serving the poorest families; $.20 goes to help provide opportunities for our ASAP members to help abolish extreme poverty firsthand and $.10 is used to help keep ASAP up and running and growing into the future.

1. Sachs, Jeffrey (2005). The End of Poverty: Economic Possibilities for Our Time, Penguin Press
2. http://www.cgap.org/portal/site/CGAP/menuitem.b0c88fe7e81ddb5067808010591010a0/
3. http://www.cgap.org/portal/site/CGAP/menuitem.07e479bde9789e5067808010591010a0/
4. http://www.cgap.org/portal/site/CGAP/menuitem.07e479bde9789e5067808010591010a0/
5. http://www.cgap.org/portal/site/CGAP/menuitem.5cb3955e9924016067808010591010a0/