Chronic poverty is a condition that requires an understanding of the processes that make, and keep, people poor. The economic analysis of chronic poverty must take into account the interaction between external circumstances (initial wealth social status, health) and intrinsic psychological factors (aspirations, self-confidence, beliefs).

It is proposed to evaluate how access to micro-finance and processes of formalisation can impact on poverty by investigating two policies in Ghana and Tanzania. The first is the expansion of micro-credit services into randomly selected communities by several partner NGOs. The second is the implications of a process of formalising business structures currently underway in Tanzania.

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