Archive for category: Financial Instruments

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Remittances to Kenya Lift Households Out of Poverty

Remittances to KenyaBetween June 2024 and May 2025, remittances to Kenya totaled KES 931.8 billion (approximately $7.2 billion). Recipients spent the largest share of remittance income on food, household goods, education and medical care, a pattern linked to progress on the Sustainable Development Goals covering poverty reduction. Even so, the reported spending patterns do not by themselves prove that remittances caused progress on the SDGs. Behind Kenya’s remittance figures are families like Mohammed Juma’s, who lived better lives thanks to the money they received.

Kenya’s Economic Reality at a Glance

When discussing the economy of a country, dry statistics often obscure the human reality. However, behind every data point lies a real household trying to pay school fees or put food on the table. To understand the weight of a single household remittance, consider the broader financial environment facing families: In 2022, nearly 40% of the population (39.8%) lived below the national poverty line, while 45.48% survived on less than $3 a day. The Multidimensional Poverty Headcount Ratio, which tracks deprivations in health, education and basic living standards, sat at 47.28% in 2022. Between 2015 and 2021, total per capita income dropped by 3.09%, and for the poorest 40% of the population, it fell even faster at an annualized rate of 1.18%. For Kenya’s population of over 56 million people, the overall unemployment rate hovered at 5.4% in 2024, with youth unemployment more than double that at 11.93%.

With nearly half the population experiencing multidimensional poverty and most new jobs anchored in the unpredictable informal sector, financial stability is a daily balancing act for many Kenyan families.

One Wage Abroad Rebuilds a Family’s Future

Mohammed Juma, known locally as Modi, grew up along Kenya’s coast in Kilifi County—a region known globally for tourism. While its attraction makes the coast popular, locals in Kilifi often experience an air of hopelessness because of poverty. Poverty pushes many people out of Kilifi to find better work. Juma’s wife, Aisha, wanted a fresh start. She found a job as a house manager in Saudi Arabia in 2023. A licensed employment agency helped her make the big move abroad. Aisha sends home about $1,200 a month. That money pays school fees for the couple’s two daughters. It also funds eight rental units the family is building for extra income. Juma volunteers at a local community-based organization, where he shares his family’s experience with neighbors who hope for the same kind of opportunity.

The Next Step for Remittances to Kenya

Kenya’s government and financial regulators are working to simplify inflows. The Central Bank of Kenya licensed six new remittance operators over an 18-month period, bringing the total to 24.

Mobile money adoption among Kenyan adults climbed from 27% in 2011 to 92% in 2024.

Fintech platforms carried just 1.92% of remittance inflows in 2024, leaving considerable room for growth as more digital operators enter the market.

Costs remain a barrier to efficient remittances. Sending $200 to Kenya carries an average fee of 9.15%. That is above the United Nations Sustainable Development Goal target of 3%.

Digital platforms, mobile wallets and newly licensed fintech operators could help make remittances more accessible to Kenyan households, particularly in rural areas. Initiatives supported by the International Fund for Agricultural Development and the European Union have highlighted the potential for digital remittances to reduce transaction costs and expand financial inclusion. For families receiving money from abroad, even a small reduction in transfer fees could leave more funds available for tuition, livestock or food.

– Otieno Onyango

Otieno is based in Nairobi, Kenya and focuses on Technology and Solutions for The Borgen Project.

Photo: Unsplash

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India’s Lakhpati Didi Initiative: Increasing Women’s Income

Lakhpati Didi InitiativeIn Nongrah village in Meghalaya, India, a middle-aged woman, Lanawanka Lamin, runs a small grocery store-cum-tea shop serving her local community. Stocked with everyday essentials and simple refreshments, the shop has been an important source of income for her family. Before this shop, her earnings were limited, barely enough to meet daily needs.

In 2021, she joined her local self-help group, which provided her with a small loan to start her business. She began as a street vendor, but as business boomed, with access to a larger loan and training from local officials, she gradually expanded it into a grocery store and tea shop.

Today, Lanawanka is one of millions of women across India who have benefited from self-help groups under the Lakhpati Didi initiative by the Ministry of Rural Development. She is what the government now calls a “Lakhpati Didi”: a member of a self-help group earning at least ₹1 lakh annually. The term signals more than income. It points to a broader shift, from irregular, precarious earnings to more stable and sustainable incomes for rural women. Implemented through the Deendayal Antyodaya Yojana–National Rural Livelihoods Mission (DAY-NRLM), the Lakhpati Didi initiative aims to support women in achieving an annual income of more than Rs.1 lakh and a decent standard of living through livelihood diversification, skill development and financial literacy. To qualify, this income must be sustained over at least four agricultural seasons or business cycles, with an average monthly income exceeding Rs.10,000.

From Credit to Livelihoods

This transformation is driven by a combination of community support, skill-building and access to new economic opportunities. To enable women to become Lakhpati Didis, the ministry first identifies potential Lakhpati Didis and then establishes a ground support and resource system. These capacity-building institutions and resource persons provide women with training, assets and funds through credit while offering continuous guidance to help them develop and sustain their livelihoods. The 2026 to 2027 Union Budget allocated Rs.17,280 crore to DAY-NRLM to invest in rural women’s livelihoods. By early 2026, 30 million women in self-help groups (SHGs) attained the Lakhpati Didi status.

This program is not merely a financial initiative to support basic livelihoods but one that enables steady incomes and builds long-term economic resilience among rural women. The initiative positions rural women as the drivers of local development, moving from “Welfare to Women-Led Development.”

Diversifying Livelihoods

The Lakhpati Didi initiative has supported and guided SHG members to start businesses across different sectors, including dairy, poultry, food processing, tailoring, retail and agri-services, diversifying the family income. In Magurchara village of Tripura, women at the local Self Help Group — Nari Shakti Mahila Dal — have achieved an average income of Rs. 25,000 to 30,000 per month, which is 2.5 times the scheme’s requirement. The impact is not merely a question of increasing household incomes but also of diversifying them.

In Chhattisgarh, Janki Verma was able to access a loan under the scheme, enabling her to expand her sewing business and increase her annual earnings from ₹12,000 to ₹2.24 lakh — an increase of almost 19-fold. Businesses like those of Janki and Lanawanka are not simply boosting household incomes; they are becoming an important safety net in rural communities, where livelihoods are often seasonal and dependent on climate and agricultural conditions. In the event of a climate shock or a poor harvest, families with diversified sources of income have an additional livelihood to fall back on, reducing their dependence on a single and unpredictable source of income.

Building a Path Out of Poverty

The poverty-reduction significance of Lakhpati Didi lies not simply in helping women cross the ₹1 lakh annual income threshold, but in helping households build more stable and sustainable sources of income. For rural households vulnerable to seasonal employment, agricultural losses and unexpected expenses, diversified livelihoods can provide greater financial security and reduce the risk of falling deeper into poverty.

Rural households with higher and more reliable incomes may also have greater resources to spend on essential needs such as food, education and health care. By strengthening women’s earning capacity and helping households, Lakhpati Didi can contribute to reducing financial vulnerability, improving household well-being and creating pathways toward greater economic security.

A national impact evaluation of DAY-NRLM, conducted across nine states, found that women in participating SHGs experienced a 19% increase in income, alongside a 28% increase in household savings and a 20% decline in reliance on informal loans. The study also found a 4% higher proportion of women reporting secondary occupations in treatment areas, suggesting greater livelihood diversification.

As of June 2026, 34.6 million SHG members have been enabled as Lakhpati Didis. Ketki Bai Patel from Chhattisgarh is one of the millions who have achieved the Lakhpati Didi initiative status through vegetable cultivation and marketing with help from her local SHG. Her annual income has now crossed 3.5 lakhs, allowing her to build a brick-and-concrete home, buy a power tiller, and acquire an additional 5 acres of land where she now cultivates paddy.

Building Economic Security; Empowering Women

The effects of this economic security can also reshape women’s roles within their households and communities. Access to a stable source of income not only enables women to contribute more consistently to their families’ financial well-being but also provides greater financial independence and can potentially strengthen their decision-making power within households. A study on the impact of financial independence on women’s decision-making power by Dr. Shravni Sagar and Dr. Geeta Senger reveals that financial independence enables women to participate more in routine household decisions, including health care, expenditure and education. While the study was focused on Lucknow in Uttar Pradesh, an urban setting, its findings offer insight into how greater financial autonomy can influence women’s roles within their households. This can offer a useful lens for considering how increased financial independence through initiatives such as Lakhpati Didi may influence decision-making among rural women.

As women secure loans, participate in digital payments and open savings accounts, they can develop greater financial and digital literacy. Many women in remote areas face a significant digital divide, limiting their ability to navigate digital payments, e-commerce platforms and online businesses. As the Lakhpati Didi scheme expands, participating women will not only have greater access to credit and savings but will also increasingly need to navigate digital payments, e-commerce and other digital tools to manage finances and grow their businesses. This presents an opportunity to bridge the digital divide by equipping rural women with the skills and confidence to participate more fully in the digital economy.

– Maliha Khan

Maliha is based in Srinagar, Kashmir and focuses on Good News and Technology for The Borgen Project.

Photo: Unsplash

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World Bank Steps in to Help Fight Poverty in Nigeria

Poverty in NigeriaNigeria is one of the fastest-growing populations in Africa, with a growth rate of about 2.1%. Like other post-colonial nations, it has struggled to provide its youth population with employment. This has led to rising poverty, which has started to outpace the number of people employed. Based on the World Bank’s 2024 projections, nearly 47% of Nigerians have fallen into poverty. This marks a significant increase from 2019, showcasing the severe impact of COVID-19.

Nigeria’s poverty affects every sector, from health care to education. This has seriously inflated the nation’s youth unemployment rate, which reached as high as 21.5% in 2016. Women represent up to 79% of the rural workforce but are five times less likely to own their own land than men, contributing to wage and wealth inequality in the nation.

Statistics from The Conversation, citing Nigeria’s Multidimensional Poverty Index, indicate that more than 133 million Nigerians live in poverty, with the poverty rate in rural areas as high as 72%, compared with 42% in urban areas. Poverty in Nigeria rises due to several reasons, one being the post-colonial effects that many nations have faced since independence.

The country also struggles with domestic issues of ethnic tension, terrorism and bureaucratic corruption, according to The Conversation. This has led to a serious issue for the government to provide a steady line of policies that will positively reduce poverty in the short and long run.

Nigeria implemented its National Anti-Corruption Strategy 2022 to 2026, aimed at targeting corruption activities in the workplace, especially the public sector, judiciary and most importantly political financing. However, public perception of corruption and government efforts to address it did not significantly change, according to the United Nations Convention against Corruption (UNCAC) Coalition.

The Role of the World Bank

In July 2026, President Bola Tinubu unveiled a $3.05 billion package of World Bank-backed anti-poverty programs, according to Punch. The package includes $1.25 billion for the Nigeria Community Action for Resilience and Economic Stimulus program, $300 million for the Solutions for Internally Displaced and Host Communities program, and $1.5 billion for the Human Capital Opportunities for Prosperity and Equity program, which focuses on governance, primary health care and education.

Separately, the World Bank has laid out a Country Partnership Framework for 2026 to 2032, focusing on making young Nigerians more employable by supporting private sector-led job creation. As part of this framework, the World Bank approved a $1.25 billion Development Policy Financing operation to support economic reforms.

The Bank aims to increase private sector investment in development areas and help reduce poverty statistics in Nigeria, with targets including expanding energy access to 32 million people, delivering broadband to 58 million people, improving health and nutrition services for 40 million people and supporting 9.5 million farmers.

Both efforts are intended to advance the government’s “Renewed Hope Development Plan 2026 to 2030.” Tinubu said the programs represent “promises kept” under his administration’s economic reform agenda, adding that “real prosperity means no Nigerian is left behind” as the country works toward a $1 trillion economy by 2030, according to Punch.

Looking Ahead

The government aims not only to improve poverty statistics in Nigeria but also to directly impact people and their households. As Tinubu put it, positive results are emerging from Nigeria’s economic reforms, but that progress must be felt in every household, not just in national statistics.

– Tanay Ashok Sonthalia

Tanay is based in Melbourne, Australia and focuses on Good News for The Borgen Project.

Photo: Pexels

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How Microfinance in Nepal Is Expanding Economic Opportunity

Microfinance in NepalNepal has made remarkable progress in reducing poverty over the past three decades, but many people living in rural and mountainous communities still face barriers to financial services. According to the World Bank, the poverty rate fell from over 55% in 1995 to 0.37% in 2022, based on the international poverty line of $2.15 per day. Despite this progress, limited access to affordable credit continues to make it difficult for many households to invest in businesses, improve agricultural production or recover from financial setbacks. Microfinance in Nepal has emerged as one solution by expanding financial services to underserved communities and creating new opportunities for economic growth.

Expanding Financial Access in Rural Communities

Traditional banks often have limited reach in Nepal’s remote regions, where mountainous terrain and scattered populations make financial services difficult to access. To address this challenge, licensed microfinance institutions provide small loans, savings accounts, insurance products and financial literacy training to individuals who might otherwise be excluded from the formal banking system.

According to Nepal Rastra Bank, microfinance institutions play an important role in increasing financial inclusion by serving low-income households, small entrepreneurs and rural communities. These institutions allow borrowers to access capital without the large collateral requirements typically associated with commercial banks.

Supporting Women Entrepreneurs

Women make up the majority of microfinance borrowers in Nepal. Many institutions organize borrowers into community lending groups, allowing women to build credit, develop business skills and support one another while repaying loans. The Asian Development Bank notes that improving women’s access to finance strengthens household incomes while increasing economic participation and resilience.

Many borrowers use microloans to start or expand small businesses, including livestock farming, vegetable production, tailoring and local retail shops. Additional income generated through these enterprises helps families pay for education, health care and other household expenses while creating greater financial stability.

Microfinance and Poverty Reduction

The benefits of microfinance in Nepal extend beyond individual borrowers. Increased access to credit allows small businesses to hire employees, purchase equipment and expand production, creating employment opportunities within local communities. Financial services also help households build savings and better withstand unexpected economic shocks, such as natural disasters or medical emergencies.

The United Nations Capital Development Fund reports that expanding financial inclusion contributes to broader economic development by giving underserved populations access to savings, credit and digital financial services. As more Nepalese households participate in the formal financial system, they gain additional opportunities to build assets and improve long-term financial security.

Challenges Remain

Although microfinance has expanded economic opportunities for many households, challenges remain. Some borrowers have experienced difficulties repaying loans, particularly following natural disasters or periods of economic instability. Regulators have also worked to strengthen oversight of the microfinance sector by promoting responsible lending practices and consumer protection.

Nepal Rastra Bank continues to supervise licensed microfinance institutions and implement policies designed to improve transparency, financial stability and responsible credit expansion. These efforts seek to ensure that microfinance remains an effective tool for supporting sustainable economic development.

Looking Ahead

As Nepal continues to expand financial inclusion, microfinance remains an important tool for reducing poverty and promoting entrepreneurship. By providing small loans, savings opportunities and financial education to people who have historically lacked access to formal banking services, microfinance institutions are helping individuals build businesses, increase household incomes and strengthen local economies. While continued oversight and responsible lending will remain essential, expanding access to financial services has the potential to create lasting economic opportunities for communities throughout Nepal.

– Camille Utter

Camille is based in Seattle, WA, USA and focuses on Business and Technology for The Borgen Project.

Photo: Flickr

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Foreign Investment in Rwanda is Reshaping Kigali

Foreign Investment in RwandaKigali is becoming one of Africa’s leading locations for international investors, development organizations, nonprofits and foreign investment in Rwanda. Rwanda’s economy grew at 7.8% in the first half of 2025, and the country ranks among Africa’s four least corrupt nations. These numbers and the government-driven strategy show how Kigali is becoming not only a business hub but a model for development and growth across the country and internationally.

Why Foreign Investment in Rwanda Is on the Rise

Rwanda’s appeal to foreign investors has a lot to do with the stable environment. The Rwanda Development Board operates a One Stop Centre where businesses can register in a few hours, and the country allows 100% foreign ownership across the most important sectors. Rwanda is the only nation in East Africa to have concluded a Bilateral Investment Treaty with the United States, which entered into force in 2025. Meanwhile, the government’s Vision 2050 plan targets upper-middle-income status by 2035 and high-income status by 2050, goals that require sustained annual GDP growth.

Rwanda’s membership in the East African Community, the African Continental Free Trade Area and the Common Market for Eastern and Southern Africa (COMESA) gives businesses operating in Kigali access to a combined market of more than 1.4 billion consumers.

Development Organizations on the Ground

Kigali’s stability and infrastructure have drawn major international bodies beyond the private sector. The United Nations Development Programme’s (UNDP) current country program for Rwanda, running from 2025 to 2029, positions Kigali as a central node for innovation-driven development work. Key platforms and organizations include Timbuktoo, Youth Connekt and the Accelerator Lab, all of which focus on digital entrepreneurship, green jobs and youth economic empowerment.

The scale of ambition is significant. The UNDP’s program targets equipping 20,000 young Rwandans with employability skills by 2029. These programs operate against a backdrop of real need: youth unemployment stands at 20.5% for Rwandans aged 16 to 30, and approximately 78% of the population is under 35. The government’s National Strategy for Transformation 2025-2029 explicitly targets the creation of 1.25 million productive jobs with a focus on women, youth and climate-resilient sectors.

Growth That Must Reach the Poorest

The most important question surrounding Kigali’s rise is whether its economic momentum is reaching those who need it most. Rwanda’s Human Development Index grew by 119% between 1990 and 2018, the highest rate globally over that period. But as of 2017, 38.2% of Rwandans still lived below the poverty line, with 16% in extreme poverty, and 54.8% of the rural population experiencing multidimensional poverty.

The World Bank’s Country Economic Memorandum on Rwanda directly addresses this tension, emphasizing that pathways to sustainable growth must be inclusive, particularly for agriculture-dependent rural communities and women, who remain disproportionately excluded from the formal economy. Rwanda’s national frameworks acknowledge this gap: the National Strategy for Transformation 2025-2029 explicitly targets pro-poor growth, gender equality and equitable access to services as core pillars alongside economic transformation.

Looking Ahead

What makes Kigali distinctive is the combination of elements it has assembled: political stability, low corruption, investment reform and a government that has embedded poverty reduction targets directly into its long-term economic vision. Whether this model delivers for Rwanda’s poorest communities over the next decade will depend on execution, particularly whether programs like the UNDP’s youth employment initiatives translate into lasting livelihoods beyond Kigali’s city limits. As a framework for what development-oriented economic growth can look like, Kigali continues to draw international attention.

– Gia Sen

Gia is based in Mansfield, MA, USA and focuses on Business and Politics for The Borgen Project.

Photo: Flickr

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Surviving Poverty in Pakistan

Poverty in PakistanWhen Maryam was a little girl, she loved going to school.

“As I grew up, I became more fond of studying,” Maryam told The Borgen Project. “I thought that I would become a teacher, doctor, anything — but that I would study for sure.”

When Maryam was in fifth grade, she stopped going to school to work as a maid and help support her parents and three younger siblings. Her mother wanted her to continue her education, but her father did not think it was feasible.

“The circumstances did not allow it, so I had to stop studying,” she said. “There was no other adult to help out. I was the eldest. I saw that the situation at home was difficult, so I started working on my own.”

Now, Maryam is 26 and works as a maid for three households in Karachi, Pakistan. She lives with her husband, whom she married at 17, and their 4-year-old son in a small one-room apartment that has no gas, a leaky roof and a bathroom with no ceiling and a curtain as a door.

Poverty in Pakistan

Every month, Maryam earns Rs 30,000, equivalent to $150. Including her husband’s income as a rickshaw driver, there is just enough to cover their rent of Rs 15,000, rickshaw installment of Rs 20,000 and their son’s school fees and gas cylinder, both Rs 5,000, along with other monthly household expenses.

Maryam said she used to purchase groceries such as flour, sugar, oil, tea leaves, salt and pepper on a monthly basis for up to Rs 15,000, not including staples like rice or lentils. Currently, she buys her groceries in small amounts every day because it is cheaper.

For those living in poverty in Pakistan, sticking to a tight budget forces them to make sacrifices. When her son started school, Maryam said she sold her phone to pay for his uniform, school bag and stationery on top of tuition fees. She also recently purchased a small fridge for Rs 50,000, which cut into her budget for new Eid clothes, even though one of her employers loaned her Rs 37,000 to help pay for it.

“You have to kill your wishes,” Maryam said. “If I have an interest in something, then I have to look after the house first…either the child or the house, nothing else.”

She said her household usually runs well with her income, but she never has money left at the end of the month.

“I get really angry because I work for the whole month and as soon as some money comes into my hands, it all gets spent,” Maryam said. “If I had my own house, I would not have to pay rent or if I had my own rickshaw, I would have saved some of my income. But no, I never have any savings.”

Rising Cost of Living

Sometimes Maryam picks up extra cleaning jobs after work to pay for new shoes, clothes and educational expenses for her child.

“I work in three houses and I am not saving, so I feel like I should work more. But with time, I am losing my strength. I have been doing this work for so long, I get tired,” she said.

When Maryam managed to save some money, she put a down payment of Rs 120,000 on a 120-acre plot of land with the hope of owning a house and started paying monthly installments totaling Rs 170,000. However, she later found out that five other people were also paying for the same property. Although she was refunded her down payment, she lost the money she put toward the installments. Maryam said she did not pursue legal action, even if it would be free, because she is afraid someone will come after her family.

Another time, Maryam spent Rs 150,000 on a hysterectomy operation for her mother. The procedure required confirmation from an MRI scan, which costs Rs 16,000, an expense her family could not afford. Eventually, one doctor was willing to perform the surgery based on the results of an ultrasound.

Lack of Fair Pay

Maryam said her family only knows two professions: maid or rickshaw driver. The same applies to her relatives who completed their education at the matric, or 10th-grade, level.

“The boys are well-educated, but they still drive a rickshaw and the girls are also well-educated, but they still work,” she said. “It is very difficult to find a job in Pakistan.”

After Maryam married, she pursued a long-time interest and learned beauty work at a salon. Even then, she could not land a job because she had only one year of experience in the field. As a maid, Maryam completes various household tasks, including sweeping, mopping, dusting, ironing clothes, cooking, washing dishes and cleaning bathrooms.

One of her employers pays her Rs 9,000 per month, but Maryam said it should be closer to Rs 15,000 based on the size of the house. Another employer pays her Rs 7,000 per month when it should be Rs 18,000 given the workload. Once, Maryam mentioned her low pay to one of her employers but was told that someone else would do the work for less.

Poor Treatment

Maryam said the most challenging part of her job is not the work itself but tolerating insults from her employers.

“Everyone scolds me…. When people scold me, it makes me feel bad,” she said. “I cannot say anything. I stay quiet. I just cry.”

Whenever her employers feel she did not adequately complete a chore, Maryam said they require her to redo it without paying for the extra work.

“They are not paying me for free, nor am I working for free, so why should I have to listen to so many scoldings?” she said. “I am a human being too.”

Maryam said she does not share these struggles with her husband anymore because he would stop her from working, but her income keeps the peace in her home and pays for her child’s education.

Benazir Income Support Program

Maryam said many people in her husband’s family receive financial assistance from the government through the Benazir Income Support Program (BISP). Families living in poverty in Pakistan are eligible for this assistance if they have a monthly salary of less than Rs 50,000.

Every four months, qualified recipients receive Rs 13,000 in cash, which accounts for Rs 3,250 per month. To register, an individual brings their National Identity Card and children’s Child Registration Certificate to a BISP office and fills out a survey to complete the application, which is free.

However, Maryam said she has not signed up because it would be difficult for her to collect the payments. The address on her National Identity Card is for her family’s home in her village, not where she lives and works in Karachi.

“It costs Rs 3,000 to go to the village and again Rs 3,000 to come back. There is no point,” she said.

She was also told that registering for the program is expensive and lengthy. Maryam said her family members paid someone Rs 20,000 to collect their documents and enroll on their behalf. That person also pocketed the first payment her relatives received.

Saverya Foundation UK

Saverya Foundation, United Kingdom (U.K.), is a women’s empowerment charity that provides shelter and training to women living in poverty in Pakistan. Maryam said she may have heard of it but has not used its services.

The organization’s goal is to help women become financially independent by building skills that will allow them to work or start their own business from home. These skills range from computer education to beauty work, sewing, stitching and embroidery. The charity has helped more than 10,000 women in Pakistan.

The Future for Maryam

Maryam said that whenever she comes home tired from a long day at work, she often thinks about opening her own food stall.

“I really want to cook,” she said. “It is better than doing this job. I have to listen to everyone’s scolding here, but I will not have to [over] there. It will be my own work.”

As for her son, Maryam is determined that he stay in school.

“Whatever degree he wants to study, whatever it is, I will make sure that he can do it,” she said. “I could not fulfill my dreams, but my son will fulfill his.”

– Umaymah Suhail

Umaymah is based in Karachi, Pakistan and focuses on Good News and Global Health for The Borgen Project.

Photo: Umaymah Suhail

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Unconditional Cash Transfers: The Most Benefit for Women

Unconditional Cash TransfersA growing body of research over the past decade has examined the impact of direct welfare payments to families living in poverty. Now, a new meta-analysis combining studies across 45 countries offers one of the clearest pictures yet of how unconditional cash transfers benefit women more than other forms of payment. The study, published in the journal “Nature Human Behavior,” analyzed dozens of social security programs and found that unconditional payments produced an effect size more than twice that of conditionally funded cash transfers. 

Benefits included higher labor force participation, increased work productivity, lower debt levels and greater autonomy and decision-making power. The analysis found little evidence of so-called dependency effects, the concern that recipients reduce work effort after receiving benefits.

Conditional Cash Can Increase Women’s Burden of Work

The international research team, led by Amber Peterman at the University of North Carolina at Chapel Hill, argued that unconditional cash transfers may be more effective because they increase women’s choices and freedom. The researchers wrote: 

“Some studies point to potential adverse effects or unintended consequences of social security nets for women. A common example raised is the potential for cash transfers with conditions to increase women’s unpaid care burden, reinforcing their involvement in child care or domestic work. This might occur if programs designate women as responsible for attending mandatory training associated with the intervention or for monitoring children’s schooling or health due to co-responsibilities.”

The authors acknowledged several limitations with their analysis, including the short-term nature of many studies. They were also unable to include studies published in French or Spanish, thereby limiting the generalizability of the findings. However, they remained relatively confident that unconditional cash transfers yield the greatest benefit for women compared to other forms of aid.

Unconditional Welfare Payments

One of the largest programs, Brazil’s Bolsa Família, was launched in 2003. Research shows the transfers helped mothers enter the labor market by increasing children’s school enrolment, without weakening incentives to work. In the nonprofit sector, GiveDirectly has emerged as a leading advocate for unconditional cash payments.

The organization argues that direct transfers bypass much of the bureaucracy and the administrative costs associated with traditional aid models. These include food distribution, training programs and other service-based interventions. One of its flagship programs in Kenya delivered one-off payments of $1,000 to more than 10,000 households between 2014 and 2017.

Program researchers say the initiative reduced infant mortality by 48% and achieved other gains. Miriam Laker-Oketta, a Ugandan doctor and senior research adviser at GiveDirectly, told the Guardian last year: “The problem with big aid organizations is that their approach is based on training and advice. They tell people what to do and how to spend their money. But whether in Uganda, Yemen, India or the U.S., direct cash support has shown that when people living in poverty receive money, they know best what matters to them and they invest in that.” 

Caution Regarding the Inflationary Effect

Still, some economists urge caution about direct cash payments. World Bank economist Eeshani Kandpal, who has studied cash transfer programs in the Philippines, points to research showing negative spillovers. Transfers can raise local prices for certain staple foods and increase stunting rates among children in households that did not receive payments.

Kandpal adds that smaller, short-term transfers targeted to fewer recipients within each village or market are less likely to trigger inflation. Despite ongoing debate over design and potential unintended consequences, there is growing evidence supporting direct money transfers. Unconditional cash transfers generate the greatest benefit for women compared to other forms of payment or aid.

– Lawrence Dunhill

Lawrence is based in London, UK and focuses on Technology and Global Health for The Borgen Project.

Photo: Wikimedia Commons

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The Impact of IMF Debt Restructuring in Zambia

IMF Debt Restructuring in ZambiaNovember 2020 saw Zambia become the first African nation to fail to meet its obligated debt payment to the International Monetary Fund (IMF), missing a payment of more than $40 million. In 2022, the country signed an Extended Credit Facility (ECF) agreement on the terms that it would allow more fiscal freedom to reinvest in stable, supported social reform. 

Sovereign Domestic Debt in Zambia

In 2019, Zambia’s external debt totaled almost $16 billion. A combination of declining national GDP, increased borrowing for commercial projects and a sustained fiscal deficit, further entrenched by the global financial impact of the COVID-19 pandemic, left the country unable to maintain economic growth.

Much of this debt was also worsened by inflexible loan agreements with bilateral lenders. As a result, the type of debt Zambia accumulated carried higher interest rates and strict repayment deadlines that the country struggled to meet.

Before defaulting on its November 2020 payment, Zambia’s debt-to-GDP ratio, a key indicator used by the IMF to calculate a country’s ability to repay debt, was nearing 103%. The IMF expects that countries with ratios below 60% are more able to repay loans effectively and sustainably. Ratios above this level indicate a high risk of economic default.

Conditions in Zambia were classified as extreme poverty under the United Nations (U.N.) frameworks, with more than half of the citizens living on less than $2 per day.

The Gamble of Restructuring

In response to growing trends of debt defaults and fiscal instability in low-income countries, the IMF and the World Bank launched two initiatives aimed at providing debt relief and encouraging poverty reduction strategies: the 1996 Heavily Indebted Poor Countries (HIPC) Initiative and the 2005 Multilateral Debt Relief Initiative (MDRI).

Support from these institutions allowed countries with the highest debt-to-GDP ratios to access comprehensive debt relief. These programs expanded following the COVID-19 pandemic, which disrupted global economic growth and placed pressure on international trade. The expansion produced the G20 Common Framework.

After defaulting in November 2020, Zambia applied for debt treatment under this framework. The goal was to temporarily stabilize debt levels while also improving fiscal management.

The application was formally accepted in the summer of 2022. Zambia received a 38-month ECF worth $1.3 billion, which the IMF increased to $1.7 billion in 2024. Upon approving the ECF terms, the IMF stated that efforts to alleviate Zambia’s debt distress would include increased social spending to “improve access to basic social services… [provide] a critical mitigant against food insecurity… and [increase] spending on health and education.”

The Impact of IMF Debt Restructuring in Zambia

Alongside institutional reforms aimed at preventing future debt mismanagement, IMF debt restructuring in Zambia has also produced several developments affecting citizens’ daily lives.

Across the health and education sectors, the ECF agreement allowed the Zambian government greater fiscal freedom to recruit “tens of thousands of teachers and health workers.” This expansion has improved access to education and strengthened service delivery in clinics and hospitals.

The government also expanded the Social Cash Transfer (SCT) scheme, which provides welfare payments to the country’s most vulnerable and excluded families. More than 1 million households were expected to receive support by the end of 2022.

Although current data remains limited due to gaps in surveys and census collection, the Civil Society for Poverty Reduction in Zambia reports that poverty remains widespread, reaching about 60% of the population in 2024. However, the organization notes that long-term economic stabilization may help lift millions of Zambian households out of poverty.

Some indicators of stabilization have already appeared. Inflation has declined steadily for more than a year and GDP growth has returned for the first time since before the COVID-19 pandemic.

Zambia’s ECF deal officially ended in October 2025. In reviewing progress, the IMF reported earlier this year that while fiscal restructuring during the 38 months showed progress, long-term sustainability will depend on the Zambian government maintaining these reforms independently.

Implementing Positive Social Change

Strategic initiatives like those led by the IMF still face barriers to comprehensive poverty reduction. One of the most significant challenges is the time required to negotiate funding and relief terms.

Zambia’s government waited nearly two years for its agreement to move forward. Other countries in the region, including Ethiopia, Ghana and the Democratic Republic of the Congo, have also experienced delays ranging from months to years before reaching similar agreements.

Some scholars attribute these delays to rigid institutional processes or lingering structural inequalities in global financial systems. The IMF instead points to “delays on structural conditionality” as a key factor slowing negotiations.

Looking Ahead

Despite the challenges, Zambia offers one example of how IMF-supported debt restructuring and ECF programs can provide low-income countries with a structured pathway out of financial crisis. These programs aim to restore macroeconomic stability while protecting essential social spending during broader institutional reforms.

By combining fiscal reform with commitments to health, education and social services, such programs seek to address immediate economic pressures while strengthening long-term fiscal capacity. The impact of IMF debt restructuring in Zambia illustrates how coordinated relief, fiscal reform and targeted social investment can help move a country from default toward stability and create a foundation for sustainable growth and gradual poverty reduction.

– Hannah Michie

Hannah is based in Nice, France and focuses on Good News and Politics for The Borgen Project.

Photo: Flickr

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Debt Relief in Zambia and Support for Public Health Systems

Debt Relief in ZambiaDebt relief in Zambia has been pursued through international restructuring mechanisms, including the G20 Common Framework, the International Monetary Fund (IMF) and official bilateral creditors. Zambia faced elevated external debt levels before restructuring. It entered into a formal debt treatment process under the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative.

On June 22, 2023, Zambia’s Ministry of Finance and National Planning announced that Zambia had reached an agreement with its Official Creditors’ Committee on debt treatment under the Common Framework. The IMF issued a statement the same day welcoming the agreement and describing it as a significant step toward restoring debt sustainability. The Paris Club has also documented the establishment of a creditor committee for Zambia under the Common Framework, identifying the coordination structure for official creditors participating in Zambia’s treatment.

Structure of the IMF Program Supporting Debt Relief

In August 2022, the IMF Executive Board approved a 38-month Extended Credit Facility (ECF) arrangement for Zambia. The IMF stated that the program aimed to restore macroeconomic stability and restore debt sustainability. It further noted that the arrangement was designed to create fiscal space for social spending.

In January 2026, the IMF reported the completion of the sixth and final review under the ECF arrangement, noting total disbursements under the program and describing ongoing reform efforts. The IMF has publicly linked the ECF-supported reform program to fiscal consolidation measures and debt restructuring milestones. The debt treatment agreement under the Common Framework, according to the IMF, was consistent with restoring debt sustainability.

International Institutions Supporting Zambia’s Health System

The World Bank Group issued a public statement on June 22, 2023, welcoming the Official Creditors’ Committee agreement on Zambia’s debt treatment. The Group described it as a milestone toward restoring debt sustainability. In addition to macroeconomic support, the World Bank documentation identifies active health-sector projects in Zambia.

The “Zambia COVID-19 Emergency Response and Health Systems Preparedness Project” states that its development objective is to prevent, detect and respond to COVID-19 threats in Zambia and strengthen national public health systems for preparedness. The World Bank also hosts documentation on Zambia’s National Health Compact, which outlines financing targets and policy commitments in the health sector. There is insufficient data, based solely on the publicly available compact document, to verify whether all financing targets have been fully implemented.

Debt Relief in Zambia as a Fiscal Policy Tool

Public statements from Zambia’s Ministry of Finance and the IMF describe debt relief in Zambia as part of a broader effort to restore debt sustainability and stabilize public finances. IMF communications explicitly state that creating fiscal space for social spending is an objective of the ECF-supported program. There is insufficient data, from the cited sources alone, to verify a quantified causal relationship between specific debt restructuring milestones and year-by-year changes in Zambia’s public health budget allocations.

Verification would require direct reference to Zambia’s enacted national budgets and attributable institutional analysis linking debt-service adjustments to sectoral expenditure changes.

– Aiden Moriarty

Aiden is based in Rowley, MA, USA and focuses on Business and Politics for The Borgen Project.

Photo: Unsplash

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Charity Foundation Investing in Multiple Sarawakian Organizations

Sarawakian OrganizationsOn February 1, 2026, the Dato Tan Guek Kee and Datin Lee Siew Ling Charity Foundation invested in multiple Sarawakian organizations, ranging from nonprofit groups to school boards, totaling 1.29 million Malaysian ringgits (RM). The foundation also provided aid to 19 undergraduate students, both local and overseas, amounting to RM194,080 to support their academic and career pursuits. Sarawak ranks as the third poorest state in Malaysia based on long-standing assessments. Following the 2022 election, Sarawak has generated renewed interest and discussion regarding the assessment of its school systems and the reclamation of state autonomy.

Despite promises of greater autonomy, federal intervention has continued to limit self-governance due to centralized power and limited resistance from state leaders. According to the United Nations Children’s Fund (UNICEF), as of February 2026, education stakeholders in Sarawak have strengthened their capacity in educational planning and implementation. Promoting adolescents’ ability to make informed decisions can contribute to improved living conditions and social development.

Background of the Charity Foundation

Dato Tan Guek Lee, founder of the Lee Onn Group, a Sarawakian company focused on housing development, established the Dato Tan Guek Kee and Datin Lee Siew Ling Charity Foundation in 2013. Since then, the foundation has hosted annual charity events and invested more than RM15 million in Sarawakian organizations. It has also provided educational and development opportunities to both organizations and individuals.

In 2026, the foundation awarded grants to 30 organizations, including the Kuching Autistic Association, Kuching Life Care Society, Chung Hua Middle School Education Foundation and the Federation of Kuching Division Community Associations. During its 2025 annual event, the foundation donated RM1,429,000 to 31 charity organizations, nonprofit groups and educational and religious institutions. It also provided aid to 25 students from local and overseas universities and institutions.

Community Identity and Development Priorities

The organization frequently uses the phrases “Sarawak First” and “Jaga Sarawak Baik-Baik,” or “Take Very Good Care of Sarawak,” in its public communications. “Sarawak First” represents the movement toward greater autonomy and development within Malaysia.

Sarawak, like many regions globally, has faced economic challenges related to the COVID-19 pandemic, global economic slowdown and geopolitical tensions. Residents have emphasized resilience in overcoming these pressures to improve economic conditions. “Sarawak First” promotes the goal of an inclusive, prosperous and harmonious society.

“Jaga Sarawak Baik-Baik,” a phrase associated with Tok Nan, reflects the inclusive nature of Sarawak’s diverse communities and reinforces unity and social cohesion.

While the foundation does not explicitly state these values beyond public messaging, it reflects these principles through its commitment to local development and philanthropy in Sarawak, including encouraging other entrepreneurs to contribute.

Looking Ahead

Deputy Premier Datuk Amar Dr. Sim Kui Hian described the foundation’s investments in Sarawakian organizations as a meaningful contribution to human capital, social well-being and the future of society. He expressed hope that the foundation’s support would strengthen these organizations and empower vulnerable communities and youth to improve their society.

– Cindy Nguyen

Cindy is based in Albuquerque, NM, USA and focuses on Good News and Global Health for The Borgen Project.

Photo: Unsplash