The terms poverty industry or poverty business refer to a wide range of money-making activities that attract a large portion of their business from the poor because they are poor. Businesses in the poverty industry often include payday loan centers, pawnshops, rent-to-own centers, casinos, liquor stores, lotteries, tobacco stores, credit card companies, and bail-bond services. Illegal ventures such as loansharking might also be included. The poverty industry makes roughly US$33 billion a year in the United States. In 2010, elected American federal officials received more than $1.5 million in campaign contributions from poverty-industry donors.
In poorer countries, the poverty industry exploits the bottom of the pyramid and its extent can at times be used as a litmus test to assess the effectiveness of philanthropic poverty-alleviation initiatives. In some cases, the poverty industry directly takes advantage of philanthropic poverty-alleviation initiatives (e.g. formal, government-supported microfinance). For example, some moneylenders misrepresent themselves as formal microfinance initiatives or obtain loans from formal microfinance initiatives through deception. They on-lend these loans to micro-entrepreneurs (informal intermediation).
- "Google bans ads for bail bonds services". Inside AdWords. May 7, 2018.
Studies show that for-profit bail bond providers make most of their revenue from communities of color and low income neighborhoods...
- Rivlin, Gary (9 June 2010). "Fat Times for the Poverty Industry". The Atlantic. Retrieved 22 July 2013.
The pawnbroker, the subprime auto lender, and the rent-to-own operator might say the same. These and other merchants, part of what might be called the poverty business...
- "EXPOSÉ on THE JOURNAL: The Business of Poverty". Bill Moyers Journal. Retrieved 4 June 2010.
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- Rivlin, Gary (June 2010). Broke, USA: From Pawnshops to Poverty, Inc.—How the Working Poor Became Big Business. HarperBusiness. ISBN 0061733210. Retrieved 22 July 2013.
- McNay, Don (29 July 2011). "Legalized Loan Sharks". The Huffington Post. Retrieved 22 July 2013.
The poverty industry has given huge contributions to lawmakers. According to the Citizens for Responsibility and Ethics in Washington, payday lenders donated more than $1.5 million to federal office holders during the 2010 election cycle.Cite journal requires
- Arp, Frithjof; Ardisa, Alvin; Ardisa, Alviani (2017). "Microfinance for poverty alleviation: Do transnational initiatives overlook fundamental questions of competition and intermediation?". Transnational Corporations. United Nations Conference on Trade and Development. 24 (3): 103–117. doi:10.18356/10695889-en. UNCTAD/DIAE/IA/2017D4A8.
- Arp, Frithjof (12 January 2018). "The 34 billion dollar question: Is microfinance the answer to poverty?". Global Agenda. World Economic Forum.
- Hudson, Michael, ed. (1993). Merchants of Misery: How Corporate America Profits From Poverty. Introduction by Maxine Waters. Common Courage Press. ISBN 978-1567510829. Retrieved 22 July 2013.
- Caskey, John P. (1996). Fringe Banking: Check-Cashing Outlets, Pawnshops and the Poor. Russell Sage Foundation. ISBN 978-0-87154-180-2. Retrieved 22 July 2013.
- Hatcher, Daniel L. (2016). The Poverty Industry: The Exploitation of America's Most Vulnerable Citizens. NYU Press. ISBN 978-1-4798-7472-9.