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Isahakuyan (2012) Causal Links between Local Supply Chain Development Projects and Poverty

  • This review, based on secondary review of program and project evaluation, case studies and findings from the IFC Jobs Study, highlights that value chain initiatives in general and training programs for SMEs and farmers impact poverty both directly and indirectly. SMEs are the biggest contributors to formal employment and strengthening them can have a positive effect on quantity and quality of jobs, especially for the poor. In terms of indirect channels, strengthening supply chain linkages, and specifically, providing training can assist in formalizing SME’s and increasing their ability to participate in global value chains.
  • For agriculture value chains, this expanded market access can have a significant impact on farmer incomes. Further, these initiatives will result in increasing productivity of these firms and create growth. Strengthening supply chains also improves access of the poor to products and services.  The Sustainable Business Advisory business line provides several products for strengthening supply chain linkages including SCI, EST and FAST. While the review of select products suggests a poverty impact, there have been few evaluations or tracking of income changes to identify the poverty reduction effects. This also points to the need for further work on development and/or adoption of a new set of indicators and methodology.
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