Every time my young nephew sees a pulubi he wants to try to understand why they're less fortunate. How can I explain the concept of poverty in a kid friendly way?

Tell him that sometimes, God give these people obstacles that they weren't able to overcome for now (say, health condition that made them broke, or lack of education, lack of motivation to find job). And if the time comes they've got through their obstacles, they will eventually live a better life. Right there, you can inject a lesson that he should strive for his dream so he could live a good life and help these people overcome their obstacles as well.