THE POTENTIAL OF COMMUNITY LEVEL SOCIAL
GRANTS AS PROMOTIVE SOCIAL PROTECTION
MEASURE
FLORA KESSY
INTERNATIONAL SOCIAL PROTECTION CONFERENCE
15-17 DECEMBER 2014, ARUSHA
Outline
• Introduction
• Research questions
• Conceptualizing Social Protection
– Vulnerability and Risks
– Linkage with economic growth
• Methodology
• Results
– Managing the grants
– Promotive aspects of the grants
– Conditions enhancing the functionality of the grants
• Conclusion and recommendations
Introduction
• Cash transfers-one of potential social protection
measure in the current development discourse
• Cash transfers (conditioned or unconditioned have
shown to:
–
–
–
–
Increase consumption level of poor households
Increase human capital investment
Cushion/protect households from deprivation
Avert/prevent deprivation/impoverishment
• Evidence on the potential of social protection in
form of cash transfers in promoting economic
growth is scanty
Research Questions
• Key question: Under which conditions do
development grants work as a promotive social
protection measure?
• Specifically, the study answers the following
questions;
– How is the grant managed by each group of poor rural
women?
– What are the major promotive aspects of the grant?
– What conditions enhance the functionality of the
grant?
The 3 “Ps”
• Social protection as a concept has evolved
considerably gaining breadth over time:
– Protective measures (insurance and
diversification)
– Preventive measures (social assistance and
coping strategies)
– Promotive measures (growth catalyst)
What is New in Social Protection?
• The radical definition that takes promotive and
transformative approaches;
– Promotive SP aims at strengthening production
capabilities of the poor
•
•
•
•
Education and health subsidies
Agricultural subsidies
Microcredit programs targeting the poor
Grants (conditioned or unconditioned)
– Transformative SP is mainly concerned with promoting
equity (social equity and inclusion), empowerment
and economic and social-cultural rights.
Promotive SP and Economic Growth
• Promotive SP is seen as catalyst for economic
growth through;
– Enabling the poor to partake in economic
development
– Improving labor productivity (investments in
agriculture, off farm income generating
activities), thus enhancing incomes of poor
households)
– Human capital development (improve
productive capacity)
– Asset accumulation and conservation
Social Protection and Livelihood Nexus
Dev Grants
H
Vulnerability
Context/
Generalized
insecurity
Livelihood
strategies
S
P
Househ
olds’
assets
N
F
H= Human capital
S = Social capital
N =Natural capital
F = Financial capital
P = Physical capital
Livelihood
outcomes
such as
enhanced
incomes
Methodology
• Exploratory study conducted in ten villages in
Kilombero and Ulanga districts which are the home of
the groups of women supported by the Ifakara Health
Institute (IHI)
– 127 out of 382 members from all groups were randomly
sampled
– 10 Focus Group Discussions (FGDs); one per group
– Key Informants; Community Development Officers (2),
District Cooperative Officers (2), IHI staff in charge of the
implementation the project (2).
• Data collected using a questionnaire with both open
and close ended questions and an interview guide
Management of the Grants (1/2)
• Provision of soft loans to group members (e.g.
loans for accessing health care)
• Investing some funds in group businesses
(farming, livestock development,
procurement of power tillers)
• Revolving funds in form of loans for
investments
– Interest rate 20% (67% of respondents)
– Interest rate10%-15% (20% of respondents)
Management of the Grants (2/2)
Loans issued
Year
Average
amount (TZS)
Range (TZS)
N
2008
72,500
30,000 - 200,000
67
2009
88,300
20,000 - 400,000
64
2010
91,500
30,000 - 400,000
74
2011
104,300
30,000 - 500,000
76
2012
149,200
25,000 - 500,000
90
Groups’ Financial Position
Group
Muungano 2 Dhiki&Faraja Upendo
Neema
Pambazuko
Cash at Hand
2,235,000
833,800
775,600
1,410,000
879,350
Cash at Bank
166,000
1,000,000
1,100,000
100,000
300,000
Total Cash Available
2,401,000
1,833,800
1,875,600
1,510,000 1,179,350
Existing Loans
1,998,000
3,522,000
5,100,000
8,000,000 3,482,000
Total Bal. incl. Loans
4,399,000
3,781,957
5,355,800
6,975,600
4,936,000
4,127,553
Balance (2008)
1,323,251
87,000
800,000
9,510,000 4,661,350
1,819,547
6,399,000
190,000
250,000
ACCESS Project Grant
3,000,000
3,000,000
3,000,000
2,500,000 2,500,000
Balance (2012)
Uses of the Loan
No. Item
1. Accessing health care
2. Accessing secondary education and
vocational training
3. Investment in agriculture
4. Investment in off farm businesses including
selling of agricultural produce
5. Livestock keeping
6. Buying and renting land
7. Construction
8. Buying household appliances
Frequency
5.5%
18%
80%
41%
19%
4%
4%
2%
Preferred Investments (N=52)
Income from Various Investments, 2012
Type of Activity
Business (monthly)
Average
Income (TZS)
Range (TZS)
N
75,000
10,000 - 400,000
88
Selling
(seasonal)
paddy
857,200
50,000 - 4.5m
101
Selling
(seasonal)
maize
340,800
50,000 - 2m
38
livestock
15,000
5000 - 1.2m
64
Selling
(yearly)
Accumulation of Assets (1/2)
Asset
Battery lights
Motorcycle
Bed
Mattress
Bicycle
Cell phone
Radio
Furniture
Iron
Total
(TZS)
value Average
(TZS)
Range (TZS)
153,000
30,600
12,000 - 90,000
1,200,000 4,100,000
1,366,700
1,700,000
630,000
126,000 80,000 - 150,000
505,000
101,000 45,000 - 120,000
3,452,000
104,600 40,000 - 170,000
1,283,000
44,300
25,000 - 80,000
736,000
35,000 15,000 - 170,000
365,000
91,300 20,000 - 200,000
88,000
14,7000
8,000 - 40,000
N
5
3
5
5
33
29
21
4
6
Accumulation of Assets (2/2)
Asset
Wardrobe
Solar panel/
Battery
Television
Power tiller
Refrigerator
Plough
Sewing
machine
Total value (TZS) Average (TZS)
300,000
115,000
360,000
3,800,000
450,000
180,000
180,000
Range (TZS)
50,000 150,000
150,000
15,000 57,000
100,000
80,000 80,000
280,000
N
2
2
2
1
1
1
1
Conditions for the functionality of the grant
• Managing group dynamics by giving the group
power to decide e.g. on the use of the grant
• Accrued income from interest rate remains
within the group for further revolving
• Introduction of the savings aspect
• Provision of Business Development Services
• Entrepreneurship skills
• Identification of profitable ventures
• Training on Financial Management
Challenges
• Preference of some group members to spend
money on social issues which deceases the
amount that can be revolved for investment
• Jealous at various levels;
– Household level-husband and wife if the household
income is not pooled
– Among members-successful versus non-successful
members
– Group members and the general community
• Contextual factors e.g. animal and crop diseases,
poor road infrastructure low prices of
agricultural produce etc.
Conclusions and Recommendations (1/4)
• Promotive SP is a catalyst for economic growth
and reduction of poverty;
– Improving labor productivity (inclusive participation
in the labor market)
– Asset accumulation;
• Productive assets
• Assets to cushion the poor against impoverishment
– Investment in human capital beyond primary
education
Conclusions and Recommendations (2/4)
• Microcredit from microfinance is not an option for
extremely poor;
– Their immediate need is to smoothen consumption of
basic items such as food and accessing health care;
– Their incomes are too low and inconsistent
– They need assistance first in stabilizing their immediate
consumption needs before thinking of investment
• This calls for sequencing protection and promotion
social protection measures (two tier program).
– Grants for consumption smoothening
– Grants for investment
Conclusions and Recommendations (3/4)
• Various funding avenues are available for
youth and women through e.g. district
councils
– Provide funds in form of grants aimed and
promoting investments
– Allow the groups to manage the grants;
community development officers to provide
supportive supervision
Conclusions and Recommendations (4/4)
• Improve labor productivity by provision of
Business Development Services such as
entrepreneurship skills and financial
management.
• Development grants/cash transfers should
move beyond supporting primary education
only to also support secondary education and
vocational training.
Asanteni!!