Why Business Solutions are Essential for Ending Poverty
How market-based approaches to fighting poverty can create self-sustaining impact that improves people's income, independence, and opportunity.
Understanding the Global Poverty Challenge
Poverty is one of humanity’s most urgent challenges. Roughly 700 million people—twice the size of the U.S. population—live below the extreme poverty rate, which the World Bank defines as living on less than $2.15 a day. An additional 3.5 billion people are considered “poor” according to daily living standards that align with those of upper-middle-income countries, struggling to meet basic needs on $6.85 per day.
The causes of poverty are complex, ranging from limited access to markets to lack of capital and opportunity, but the most effective solutions are those that create long-term, self-sustaining change. Increasingly, the evidence points to one essential driver of that change: business solutions to poverty.
Here are five reasons why business solutions are so effective at fighting poverty, plus how this impact is measured and scaled.
1) “Win-Win” Business Solutions Enable Long-Term Paths out of Poverty
Private sector engagement in international development is not without controversy. It’s important that development solutions not prioritize business interests over social, environmental, and other factors. But when market-based approaches are designed to serve the needs of people in low-income communities, business incentives can be a powerful tool for continuing socioeconomic progress.
Historically, many private sector initiatives addressed poverty through philanthropy or corporate social responsibility (CSR) programs. These initiatives, while well-intentioned, often existed outside of core business operations.
What Are “Shared Value” Solutions?
In more recent years, “shared value” initiatives have gained traction.
These business strategies are designed to create both economic and social benefits, deliberately linking a company’s success to the prosperity of the communities where it operates. Unlike traditional corporate philanthropy or CSR, which often function as side projects, shared value is integrated into the company’s core business model. It focuses on identifying ways to solve social or environmental challenges that also enhance the company’s competitiveness—such as developing new markets, improving supply chain efficiency, or ensuring long-term resource sustainability.
Example: Shared Value Success Among East African Fruit Farmers
One of the world’s largest companies, Coca-Cola, used to import fruit puree from overseas for the juice it would sell in East Africa. Then an initiative to set up a local supply chain trained over 50,000 local farmers in improved fruit production and connected them to the next links in the value chain. This enabled Coca-Cola to save time and money by producing its first locally sourced juice drinks.
At the same time, the East African fruit farmers–many of whom lived at or near poverty levels–gained the long-term benefits of new skills, connections, and a better-paying, reliable market. They increased their incomes by an average of 142%, enabling many of them to send their children to school, build better houses, and afford improved medical care.
Other multinational companies are increasingly engaging small-scale farmers, artisans, and producers in their global supply chains. Initiatives like Nestlé’s Cocoa Plan and Unilever’s Shakti program ensure fair wages and invest in skill development. This not only improves livelihoods but also enhances companies’ product quality and supply chain resilience.
Strengthening Market Systems for Long-Term Poverty Solutions
Another way business solutions can create self-sustaining change is by improving market systems. A market system is the network of buyers, sellers, and other actors that come together to trade in a given product or service. Many communities are unable to earn sustainable incomes due to failures or gaps in the market systems surrounding them. For instance, local financial institutions may not offer the type of credit terms that small-scale producers require. Farmers may not have options to aggregate their crops to meet the quantity demands of buyers who are willing to pay higher prices.
Much of TechnoServe’s work involves analyzing and addressing market gaps to create, strengthen, or connect local entities in a way that improves business conditions for everyone.
Market Systems in Action: Improving Small Business Opportunity in Mozambique
In Mozambique, strengthening a market system not only increased incomes for small-scale entrepreneurs, it enabled more women to improve their livelihoods and independence.
TechnoServe went about improving the system by addressing various elements of the market to work better for small business owners, particularly women:
- Access to Management Tools and Information:
- Improved business management has been shown to lead to higher incomes, but many women entrepreneurs do not have access to tools and training. TechnoServe worked with the country’s national professional training authority and new training providers to help entrepreneurs integrate better business practices and soft skills.
- Access to Financial Services
- The project helped financial institutions create tailored solutions for women as customers and sales agents (e.g., digital savings products, digital micro-loans, more inclusive mobile money/agency banking models) and improve their financial education through campaigns and embedded services.
- Access to Quality, Convenient Products
- In Mozambique, poor information flows and weak, fragmented transport systems, along with reduced mobility, make women retailers less efficient. Distributors also often lack a strategy to target the informal segment, where most women micro-entrepreneurs operate. TechnoServe collaborated with distributors to better target this segment and to include more women in their last-mile distribution model.
- Addressing Restrictive Gender Norms
- Recognizing how social attitudes could restrict women’s success in entrepreneurship, the project launched a media campaign to influence expectations that frame what women can achieve. These communications also helped educate women in entrepreneurship and inspire them to launch, grow, and diversify their businesses. (The “radionovela” “Janete” is one example of this influential strategy.)
As a result of this approach, in the first phase of the program, 36,000 women increased their business revenue, and 15,000 jobs were created or strengthened.
2) The Local Private Sector is a Powerful Engine for Development
The local private sector is one of the most powerful engines for ending poverty and driving inclusive growth. In emerging economies, small and medium-sized enterprises (SMEs) contribute up to 40% of GDP and create as much as 70% of all jobs, providing livelihoods for millions of families.
Unlike external aid or large multinational investment, local businesses are deeply rooted in their communities. In TechnoServe’s experience, these businesses understand local needs, adapt quickly to changing circumstances, and tend to reinvest profits within local markets. When small businesses grow, they stimulate demand for local goods and services, strengthen supply chains, and increase household incomes.
They are also an important tool for boosting local employment. According to the World Bank, 1.2 billion young people in developing countries will reach working age over the next decade, but these countries are only projected to create about 420 million employment opportunities. Stimulating job growth through local business development is therefore critical to ensuring the long-term political and economic stability of many lower-income countries.
Small Businesses as a Solution to Poverty and Unemployment
A TechnoServe effort in Latin America aimed to boost the performance of hundreds of local SMEs. Training entrepreneurs in business skills and helping them access markets and financing enabled the enterprises to increase their sales by an average of 33%. The businesses also created 1,600 new jobs in their communities.
Other youth-specific programs, like those by Andela and Google’s Grow with Google, offer vocational training, mentorship, and employment—building future-ready workforces. Additionally, promoting entrepreneurship through micro-franchising or small business incubators fosters self-sufficiency and local economic development.
3) Business Investment Funds are Greater than Foreign Aid
In many emerging markets, business investment far outstrips official development assistance (ODA). If this sizable funding can be harnessed for the good of people with low incomes, it can be a powerful tool in the fight against poverty.
In 2023, foreign direct investment in emerging markets totaled $435 billion. In the same year, ODA to these developing countries reached only $160 billion. Since then, foreign aid levels have continued to decline, with the shutdown of the U.S. Agency for International Development at the beginning of 2025 and reductions to foreign assistance in the budgets of other countries worldwide.
Business investments, therefore, are roughly three times the size of foreign aid funding in developing countries overall—a disparity that is only likely to grow. So how can this private sector capital work better for people living in poverty?
How Foreign Investment Can Create Inclusive Economic Growth
The key to harnessing private sector resources in the fight against poverty is to understand and leverage business incentives for the benefit of all involved.
TechnoServe has a dedicated department of staff members drawn mainly from the private sector and/or management consulting. This Strategic Initiatives team works closely with TechnoServe country-level staff to understand local needs, while coordinating with companies that operate in the same locations.
Steps to Enable Inclusive Business Investments
Developing a shared value solution might look like this:
- Conduct a needs assessment in local communities
- Conduct a business landscape analysis for a company working in these areas
- Identify where community and company objectives overlap
- For instance, local farmers want to improve their crop quality and yields to gain more income, and food companies want to achieve a more stable supply of high-quality crops
- Develop a business plan in conjunction with all parties that outlines how to achieve these mutually beneficial objectives
- This could involve, for instance, training local farmers in better agronomic techniques to improve their crops, and connecting them with market players that can further enhance their work (e.g., suppliers of improved seeds or fertilizer; financial institutions offering favorable terms; technology solutions that improve farmers’ knowledge and market connections, etc.)
- Implement the plan, adapting as needed, and ensuring that local markets and institutions are enabled and incentivized to continue the work without TechnoServe involvement
Examples of Inclusive Business Investment That Reduce Poverty
Examples of how business investment has been harnessed to improve livelihoods in the fight against poverty include:
- Helping agribusinesses apply investment capital through business models that promote inclusive, green growth that increases smallholder farmer incomes.
- Partnering with Nespresso to train thousands of smallholder coffee farmers on regenerative agriculture techniques that improve their coffee yields and quality, while strengthening coffee processing and farmer business groups.
- Working with Anglo American to support communities surrounding mining operations in Brazil, Chile, and Peru by strengthening local businesses, youth employment, and diversified value chains beyond mining.
4) ESG and Sustainability Are Key Business Priorities
Environmental, Social, and Governance (ESG) frameworks are becoming standard in global business. Consumers are increasingly informed and energized about the sustainability operations of the companies they buy from, and make purchase decisions accordingly. Additionally, companies that collaborate with local communities in inclusive and sustainable ways help ensure the long-term viability of their operations.
For instance, most of the world’s coffee farming families currently live in poverty. But as one of the world’s most popular beverages, coffee can transform these families’ well-being with the right growing practices and market connections.
At the same time, specialty coffee companies need a reliable supply of high-quality beans to sustain their global business. Ensuring that coffee-growing families earn good incomes and grow reliable harvests, despite threats like climate change, is squarely in the interests of these companies.
Example: Regenerative Coffee as a Sustainable Business Solution to Poverty
That’s why, for instance, global coffee company Nespresso has invested in training thousands of smallholder coffee farmers in regenerative agriculture practices that improve farmers’ incomes while boosting the quality and quantity of the coffee they produce. They also partnered with TechnoServe to work with coffee processing facilities, known as wet mills, to further improve the quality and value of the coffee.
From 2013 to 2021, this approach resulted in 66,000 coffee households participating in agronomy and business training, and experiencing a $4.80 income increase for every $1 invested in the program. In a male-dominated industry, 38% of the farmers trained were women.
These results improved community incomes and living standards while helping Nespresso ensure a reliable supply of high-quality coffee.
5) Increasing People’s Income Increases Their Freedom and Opportunities
Building systems that enable people to improve their own incomes is different than handouts. While distributing goods and services for free is necessary in certain contexts, earning a sustainable livelihood allows people the freedom to make their own spending choices.
In that way, people can turn money into better education, better health, better housing, and greater freedom. Below are some of the ways people in our programs have chosen to spend the greater incomes they now earn:
- “With the money I earned, I was able to change the roof to our house, build another little house, and even buy a car.” — Rito Girón Hernández, Honduras
- “I was able to buy a cow and two oxen to pull the cart. I was able to extend my house, and I was even able to buy a water tank and goats…I was very happy because I realized educating my children would not be hard ever again.” —Magdalene Gachungiri, Kenya
- “I pay half the rent at home, I buy food, and also send some money to my father in the village…We don’t have to miss meals anymore because we can’t afford them.” —Ruth Nabatanzi, Uganda
- “I increased my coffee income by 200% … I built my family a new house and am sending my children to university.” —Lubaba Mekonnen, Ethiopia
How to Measure Business Impact on Poverty Reduction
But how do we know these market-based solutions are actually working? One of the most essential tasks in development is to rigorously measure the impact of interventions to ensure that the most effective solutions are replicated and scaled.
In the economic development sector, common metrics of progress include:
- Additional revenue gained
- Jobs created, strengthened, or filled
- Additional financing obtained
Third-party audits, certifications (such as B Corp), and public reporting can help ensure accountability. TechnoServe also rigorously tracks the revenues of the people and businesses we partner with—along with many other indicators—to ensure the effectiveness of our projects. We then analyze these data to identify successful project models and learn how to improve future approaches.
In addition to the metrics above—plus project-specific metrics—TechnoServe measures the percentage of women or women-owned businesses that benefit from our work, as well as return on program investment. In 2024, TechnoServe clients gained $7.60 in additional revenue for every $1 spent on our programs.
Another important element of measurement is long-term impact. Business solutions are designed for self-sustaining change, but mechanisms must be in place to measure if, and to what extent, this change is actually happening.
Post-project evaluations—measuring a project’s impact after it has closed—are important assessments of self-sustaining impact. TechnoServe has called for more such evaluations, in addition to rigorous regular measurement of annual impact.
FAQs about Business Solutions and Poverty
1. How can businesses help fight poverty and supply basic needs?
Businesses combat poverty by creating employment opportunities, building inclusive supply chains, reducing food insecurity, and providing essential products and services tailored to low-income populations. By aligning business models with social goals, they foster long-term economic empowerment.
2. What is a solution to poverty that involves the private sector?
A prime solution is the development of inclusive business models. These models integrate low-income individuals as suppliers, customers, or employees, creating economic opportunity while meeting essential needs affordably and sustainably.
3. How can we end poverty using entrepreneurship?
Entrepreneurship drives innovation and self-reliance. With access to capital, mentorship, and markets, individuals can launch businesses that address local needs and generate income. Supporting grassroots entrepreneurs multiplies the impact across communities.
4. Why is financial access important in poverty reduction?
Financial inclusion helps people save, borrow, invest, and insure against risks. Tools like microloans, mobile banking, and digital wallets empower people to plan their futures and escape financial vulnerability.
5. What role does technology play in reducing poverty?
Technology amplifies reach and efficiency. From e-learning platforms to telemedicine and mobile banking, tech enables access to education, healthcare, and financial services—even in remote areas—driving inclusion and development.
6. Are there global examples of businesses addressing poverty and income inequality?
Yes. Grameen Bank offers microloans to millions. M-Pesa has revolutionized financial inclusion in Kenya, and is expanding across sub-Saharan Africa. Unilever and Nestlé have inclusive supply chain programs benefiting thousands. These cases show how business innovation drives systemic change.
Conclusion: A Market-Driven Path to End Poverty
The global fight against poverty calls for a reimagining of how we do business, shifting from charity to sustainable impact. Business solutions to poverty offer a bold, proven strategy: one that, when done right, can empower communities, foster innovation, and build economic resilience.
From inclusive models and affordable technologies to infrastructure and job creation, businesses have the tools and incentives to lead this transformation. And when profit meets purpose, everyone benefits—companies, communities, and the planet.
