Q&A: A holistic approach to eliminating poverty


Youth Business International (YBI) member in Paraguay, Fundación Paraguaya, have been working across the country for over 30 years and now have over 450 staff in 28 offices, as well as partner organisations around the world. They provide and scale solutions to economic and social issues. 

How do they do this? We asked Katharina Hammler, Monitoring and Evaluation Manager.

What are Fundación Paraguaya’s main aims?

Fundación Paraguaya’s mission is to support families with limited economic resources to eliminate poverty and live with dignity by activating their entrepreneurial potential. 

We do this by supporting families to draw their own lifemap. We have four programmes to address the results: microfinance, self-sustainable schools, entrepreneurship education, and most recently, the Poverty Stoplight program. We share our models and approaches through a growing movement; our Poverty Stoplight network already includes over 14 hubs around the world.

What is the Poverty Stoplight?

The Poverty Stoplight programme is an extension of our holistic view on microfinance. It is a theoretical and practical tool to help people improve their situations and lift themselves out of poverty and is now used in our partner network of over 250 organisations in 23 countries worldwide. It involves people self-assessing their level of poverty across various indicators and coming up with individual strategies to address their needs and ultimately, eliminate these areas of poverty. The process empowers people to take ownership of their own situation.

They assign the traffic light colours - red for extreme poverty, yellow for poverty and green for no poverty - to 50 individual indicators across six areas:

  1. Income and employment
  2. Health and environment
  3. Housing and infrastructure
  4. Education and culture
  5. Organization and participation
  6. Interiority and motivation. 

We have recently evaluated clients who have used the Poverty Stoplight with those who have not and those using it decreased the levels of their red and yellow indicators three times faster than those who did not use the tool - so we know that it works! Organisations can also use these results to learn about how deprivations in different indicators go hand in hand, often finding patterns of problems that occur together and seeing how they can work together to find the root causes.

For example, after taking the Poverty Stoplight survey, our client Juan decided to quit his job and set up a horticultural business growing and selling products, thanks to Poverty Stoplight mentors and horticultural training via his smartphone. With the support of a nutritionist, he has also been empowered to be self-sufficient and provide a healthy diet for his family. This story shows how a good plan with clear priorities can make a real difference. He is now an example in his community of someone with great entrepreneurial spirit and success because of the programme. 

What are your plans for the future?

We are currently developing a new digital platform for the Poverty Stoplight tool. In the past, we have had several different versions for different areas of operation, all of which are now being combined into one platform. This will include a solutions database for future participants to learn from previous successes. The technology is currently being tested with several of our partners and we aim to launch it later this year. We also aim to launch a community platform to petition for specific public resources, based on the information the Poverty Stoplight gathers across communities. In 2018 Poverty Stoplight supported over 80,000 families worldwide and we hope these new developments will allow it to improve the lives of even more people living in poverty.

Watch a short video to learn more about the Poverty Stoplight.

Supported by

Other Resources

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Building the next generation of responsible businesses and leaders


Beating the odds: Supporting youth on the move to become successful entrepreneurs

Those who make it possible

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Hogan Lovells

Hogan Lovells

IKEA Foundation

IKEA Foundation

EEA and Norway Grants

EEA and Norway Grants

Standard Chartered Foundation

Standard Chartered Foundation

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