SOCIAL CASH TRANSFER PROGRAM EU Call for Proposals for Alternative Delivery Mechanisms Information Session, 30 th March, 2011

Background April 2006: Participatory process of designing and testing a cash transfer program begun Sept 2006: Launch of SCTP pilot scheme in 4 Traditional Authorities in Mchinji District with UNICEF funding Nov 2006: Cabinet endorses Mchinji pilot and instructs for extension to six additional districts of Chitipa, Likoma, Salima, Machinga, Phalombe and Mangochi. Jan 2007: USD 9 million allocated from Global Fund for AIDS, Tuberculosis and Malaria (GFATM) through the National AIDS Commission (NAC) to finance the pilot phase Feb 2007: A National Social Cash Transfer Secretariat is established in the Ministry of Gender Children and Community Development

To contribute to national efforts to reduce poverty and hunger among ultra poor and labor constrained households. To increase school enrolment and attendance of children living in target group households To improve health, nutrition, protection and well-being of vulnerable children in target group households. Objectives of the Program

Target Ultra poor: households that have few or no assets, little or no land, limited or no labour Labour constrained: no able bodied household member in the age group who is fit for work (are chronically ill and/or are child/female/elderly headed); or households with a dependency ratio of more than 3 At full scale (national coverage) program estimated to reach 300,000 households

Targeting SCTP uses Community Targeting Targeting is conducted by Community Social Support Committees (CSSCs): comprise of literate community members elected by the community Lists of the targeted households are presented at a Community meeting for approval / disapproval A final list of targeted households is presented to the District Social Support Committee for final checking and approval / disapproval

Targeting Inclusiveness The SCTP targeted households comprise of the following groups of people: Elderly Orphaned and vulnerable children Female-headed households (with more than 3 children) Child-headed households Chronically ill and or HIV-infected persons Disabled members

Payment Modalities Payments are made at village-cluster pay-points mapped out by the District Assembly (DA) Payments are made every month except for Likoma where payments are bi-monthly Payments are made by DA accountants who are accompanied by policemen for security This mode of payments is labour intensive and partners are currently exploring options of using Electronic payment systems for cash delivery

Transfer Levels HouseholdAmount (US$)Amount (MK) 1 person$4MK person$7MK1,000 3 person$10MK1, person$13MK1,800 CategoriesAmount (US$) / childAmount (MK) / child Enrolled Primary School Children $1.3MK200 Enrolled Secondary School Children $2.6MK400 Child Education Bonus

Beneficiaries access monthly transfer payments at a pay point Listing of households based on Form 1 CSSC Training; Collection of household data with Form 1 CSSC Training; Collection of household data with Form 1 Community sensitization meeting: Selection of Community Social Support Committee (CSSC) Community sensitization meeting: Selection of Community Social Support Committee (CSSC) Village Headman signs Form 1 to verify information is correct Community ranking meeting (household list discussed and approved by community) SCT Secretariat approves / disapproves beneficiaries Extension Workers verify households selected SCT Secretariat informs community on final list Flow Chart of Targeting, Approval & Payment Process

Coverage DistrictMchinjiLikomaMachingaSalimaMangochiChitipaPhalombeTotal Beneficiary Households Elderly headed Female headed Child headed Individual Beneficiaries Children Orphans Elders Disabled

Coverage Map MCHINJI (10,761 hhs) SALIMA (2,686 hhs) MACHINGA (4,246 hhs) PHALOMBE (3,496 hhs) MANGOCHI (4,859 hhs) CHITIPA (4,208 hhs) LIKOMA (196hhs)

Funding Government of Malawi (Human resources and transfers amounting to MK50million in the 2010/2011 fiscal year) UNICEF (Technical and Financial assistance for design of SCT pilot and for SCT program and Secretariat) The Global Fund(WB,DFID,CIDA,NORAD) (US$ 9 million for the pilot in all 7 districts till 2011). Irish Aid (Funds for transfers amounting to Euro850,000: 2010/2011) German Government (Funds for program amounting to 13 million Euros: )

Improved health and nutrition: over 80% of HHs reported intensified food diversity with meat and fish and 45% use of dairy products Education: increased school enrollment from 87% - 95%, retention, improved performance; decrease in stigma Food Security: 90% of HHs purchased livestock - ownership of livestock increased by 7 times Economic multiplier effect: cash received by beneficiaries is used in the local community Improved housing and living conditions Impact (Boston University Evaluation Report)

Capacity: Manual payments demand the presence of a number of officers from different departments at the DA, including the hiring of policemen for security Time factor: a) Timely disbursement of funds b) Implementation time Fiduciary Risk: Manual payments demand millions of kwacha to be withdrawn in cash and ferried by DA accountants Monitoring: Manual payments are limited in providing accurate evidence of cash drawn / cash management (i.e. saving) Challenges to be Addressed by E-Payment System

Communication: Manual payments demand a strong communication network for informing beneficiaries of pay day Beneficiary freedom / choice: Manual payments demand beneficiary presence on days set by the DA Corruption: Manual payments can easily be manipulated Distance of Travel: Current payment system does not provide for multiple pay-points in one village cluster Challenges to be Addressed by E-Payment System

Dignity of Beneficiaries Provide additional financial services to beneficiaries and the surrounding community (especially in respect to mobile banking) Provide access to improved network coverage Encourage saving culture Additional Benefits of an Electronic Payment System