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Poverty alleviation is the biggest challenge of this century. Almost four billion people around the globe are at the base of the economic pyramid (BOP). Microfinance institutions and commercial banks are offering broader range of financial services to their customers such as micro credit, saving accounts, remittances, insurance and mobile banking etc. which expand the access to financial services for the BOP (Base of Pyramid). However there is a difference of opinion on various approaches which should be followed by various financial institutions and governments for effectively serving these poorest of the poor people and make them effective member of the society. Some people argue that traditional approach for poverty alleviation is best suited for serving these people while others favor market based approach in this regard.

 

Being a student of Consumer Banking, you are required to give your opinion on this issue. Whether traditional or market based approach is best suited for alleviating poverty and social well-being of the people of a country? Support your answer with strong logical arguments.

 

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