Transferring cash to reduce poverty
- Posted on Thursday 4 March 2010 - 14:43By Chipiliro Kansilanga
It has become fashionable for the world to be exposed to statistics and pictures of poverty making some people believe that it is an irreversible state of affairs.
But things are actually changing for the better. Technological advances are creating new opportunities to improve economies and reduce hunger.
Governments are developing social protection policies to protect, promote and transform the livelihoods and welfare of the poorest households.
Malawi government, for example, partnered with Unicef and the National Aids Commission (Nac) and piloted a programme called Social Cash Transfer as a means to tackle poverty.
The system involves regular payments of money to extremely poor individuals or households. To qualify, families must be labour-constrained. It should show that the families cannot afford more than one meal each day. It cannot afford soap, clothing and school supplies.
The lessons from the pilot phase informed the social protection policy. Now the programme is being implemented in seven districts of Salima, Machinga, Likoma, Chitipa, Phalombe, Mangochi and Mchinji.
In Bongela Village , T/A Nyalo in Mchinji, Teresa Chatsirizika, 45, told a team of visiting journalists her story of rags to riches.
She is a mother of two daughters, Eneless, 14 and Aida 19, both are epileptic and solely rely on her for mobility and everything else. She lost her husband to HIV in 2000 and since then, poverty had bitten her like a poisonous worm.
When her husband died, she still had some hope that the property and a few small-scale businesses they had would help her sustain her family. But no, she was wrong. Her late husband’s relatives came and grabbed the property and the businesses from her.
They dealt her a more serious blow when they chased her out of their only house and from the village.
“The first days I slept in one of the unfinished buildings in the nearby market. The chief of the village sympathised with me and my daughters and gave me a little mud house which has been our only shelter,” she explained.
“We slept without food most of the days and relied on well-wishers. My daughters could not go to school any longer because they had no clothes or food,” she said.
Chatsirizika’s challenges were compounded by the fact that she had to be at home all the time, looking after her children due to the nature of their disability. This meant she could not engage in any activities to earn some money for food. Poverty weighed even heavier on her.
“There were times I wondered why I even existed”.
There was such sadness in her voice it was clear she was speaking from the depth of her being. It was the cry of her heart, her frustration. She wanted to be someone of significance who could feed her daughters and send them to school.
But for so long, life denied her that opportunity until 2006 when the pilot social cash transfer system came to Mchinji.
District Social Welfare Officer for Mchinji Ernest Chikuni told the journalists, who were sponsored by Regional Hunger Vulnerability programme (RHVP) and Frayintermedia, that the selection of beneficiaries in the scheme is transparent and it involves the communities themselves.
It was through such a process that Chatsirizika was identified for help and she started receiving K1,400 (U$10) a month to enable her meet basic household needs.
The allocation was later increased to K1,800 (U$13) in response to the rising cost of living.
She grabbed the opportunity and translated it into a window of future opportunities and a better life for her and her daughters. Unlike most beneficiaries who receive the money and use it for their immediate needs as they wait for the next month’s allocation, Chatsirizika ventured into groundnut farming so she could generate more money and remain self-reliant.
Like many vulnerable households in Malawi, she only had less than 1 hectare of land to cultivate. But every time she sold the groundnuts, she saved the profits and this continued for three years. Before the end of the third year, she discovered she had enough to afford something better than a small mud-house.
The transformation started. She employed someone to mould bricks and she slowly started buying iron sheets and other household items every month. In no time, she became a proud owner of a decent brick house, to the amazement of the chief and the entire village.
Today, despite still struggling to cope with her daughters’ disability, Chatsirizika confidently says she lives a good life and is content with what she has.
“To say the truth, the social cash transfer opened a window of hope for me and my family. Without it, I have no idea where I would be now. Despite the everyday challenges I face as a woman and mother, I can now afford food on a daily basis, soap, and my daughters are both in school,” she explained.
Most often, girls in the villages do not receive any schooling beyond primary education but Chatsirizika says she is determined to make a difference by ensuring her daughters become educated.
“I struggle to keep my daughters in school because of their disability but what I went through makes me wish a different life for them. Because I don’t want them to face what I did, I know I have to do everything to get them to school.”
It is because of such amazing stories that government and international communities are increasingly recognising the value of social cash transfers in promoting human rights and achieving the Millennium Development Goals (MDGs).
The general belief has been that these transfers not only tackle income poverty but they also address broader developmental objectives such as social development, economic growth, education, shelter and asset accumulation.
A recent study by the World Bank shows that cash transfers paid directly to teenage girls have a powerful impact in boosting their school attendance.
The study looked at a two-year cash transfer programme in Zomba, which paid small amounts of money to teenage girls aged between 13 and 22, as well as slightly larger payments to their parents. The girls received between K140 and K700 (US $1 and $5) a month, and the parents K560 and K1,400 (U$4 and U$10 a month.
The study found that school drop-outs reduced by about 40 percent, or almost by half because of the cash transfer.
According to the research, drop-out rates are high among teenage girls in the country, because of the high cost of secondary school. In addition, girls in Malawi tend to marry while young and once they get married, they stop attending school.
The research further established that the cash transfers boosted school attendance, whether or not attending school was a condition of receiving the grant.
Communications and Child Specialist for Unicef Gaëlle Sevenier, also related another Mchinji story of Blackson Kalinde and his wife Sara, who lost three of their children and their children’s spouses to Aids, leaving 20 of their grandchildren orphaned.
The elderly couple soon became the primary caregivers for four of their grandchildren.
Sevenier said although unable to work due to their age, the couple struggled to provide assistance to the remaining 16 grandchildren, as well as their surviving daughter and her six children.
The Kalindes household remained in extreme poverty for years, barely surviving on less than 20 cents per person, per day.
The Kalinde family soon learned that they met the cash transfer scheme requirements and were therefore eligible for the social protection programme, which would offer approximately K2,600 ($19) per month to the family. Now, they live with hope.
The stories of Chatsirizika and the Kalindes are perhaps a tip of the iceberg as over 70,000 beneficiaries are targeted with over 3,000 in Mchinji alone.
Uneicef and government are expanding the programme as these small sums of money transform how aid is distributed in Malawi .
Across the world, over 170 million poor people receive regular payments of money, or cash transfers, from governments.
Malawi is one of the world’s poorest countries, where 60 percent of the 13 million people live below the national poverty line. About 85 percent live in rural areas and they depend on subsistence farming for their livelihoods.
More than halfway to the 2015 deadline to achieve MDGs, major advances in the fight against poverty and hunger have begun to slow or even reverse as a result of the global economic and food crises, a progress report by the United Nations has established.
According to another poverty report by The International Policy Centre for Inclusive Growth (IPC-IG), a growing body of evidence shows that financial services enable poor people in countries like Malawi to better withstand shocks, build assets, and link into the wider economy as fuller economic citizens.
The report also reviews the experience of the MDGs to date and asks what needs to be done to achieve the goals by 2015. They ask whether some of the goals, or the approach to meeting the goals, need to be adjusted, and they look beyond the 2015 target to ask what is needed beyond that date.
“Important in all of this, is to ensure that the poor are empowered and able to participate in designing and implementing measures to reduce poverty,” says the report.
This surely takes a while for people like Chatsirizika, but at the end of the day, this woman rules the roost, even if it has been such a rough journey to get there.
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