Presentation on theme: "An Introduction to Household Economic Strengthening"— Presentation transcript:
1 An Introduction to Household Economic Strengthening Conduct an introduction exercise and – as needed – an icebreaker. 2 truths and a lie, interview your neighbor, etc. In Abuja, we started very late so we did timed 2 min intros for each person (name, org, position, why here) – bland but concise!Introduction to HES
2 The LIFT II ProjectFunded by USAID Global Health Bureau’s Office of HIV/AIDSFive-year project, through July 2018Three core partners (FHI360, CARE and World Vision) and numerous resource organizationsOffers:Support for linkages between Nutrition Assessment, Counseling and Support (NACS) and economic strengthening, livelihoods, and food security ES/L/FS servicesStrengthened community services that provide ES/L/FS support as a component of a continuum of care for families.Access to tools and resourcesM&E SupportProgram quality and implementation supportIntroduction to HES
3 Training objectives Introduce LIFT Understand economic strengthening (ES) and its rationaleLearn about major concepts and approaches in ESReview lessons in ES programmingShare additional resourcesIntroduce more in-depth trainingFrom this training we expect you will develop a broad understanding about why economic strengthening is important for HIV/AIDS and OVC programs. You will have a basic knowledge of the issues, and available tools and resources to consider when designing and implementing programs.For the purposes of this training, our focus is primarily on supporting access to food rather than availability and utilization.
4 What is Economic Strengthening? “A portfolio of interventions to reduce the economic vulnerability of households and empower them to provide for the essential needs of the children they care for, rather than relying on external assistance.” (PEPFAR working definition, 2011)
5 Why is Economic Strengthening Important? Enables households to meet their needs.Health, nutrition and economic well-being are closely linked.Positive health and nutrition outcomes usually can’t be achieved while households lack access to income.For LIFT, economic strengthening supports PEPFAR’s primary objectives:HIV preventionCare, treatment and supportImpact mitigationFirst ask the participants for their opinions before showing the slides.Links to prevention, c&s, impact mitigation. Complements other programs.[provide an example of returning to clinics due to economic circumstances]
7 ES Benefits: Practical Examples FONKOZE in Haiti: By offering a continuum of provision, protection and promotion services, FONKOZE provides integrated programming to move people along the economic strengthening pathwayNote that there is still a limited evidence base in many areas, such as ES impacts on vulnerable children (as noted in the CPC report). However, there are some cases that we can learn from.Sources:SAWSO, Empowering Better Care: Report on economic strengthening for OVC caregivers in Uganda, Project participants demonstrated improvements in number of meals eaten, support for educational success, hygienic living conditions, and understanding of health risks and behaviors relative to non-participants.Guaranteed labour in India: NREGS and Child Well Being, 2011.Savings groups in Burundi: Iyengar, Radha and Guilia Ferrari. Women’s Empowerment in Burundi: Impact Evaluation Paper, London School of Economics, 2011CPC Livelihoods and Economic Strengthening Task Force. The Impacts of Economic Strengthening Programs on Children. Review of 43 studies. Found that
9 Risks of Not Addressing Economic Needs? Brainstorm with the group. Possible answers: cannot afford health and education investments. Cannot maintain adequate nutrition. Cannot support vulnerable members of their household.
10 Understanding Your Beneficiary Vulnerability:- high- moderate- lowChallenges:- humannaturalphysicalfinancialsocialWho is the target population?What assistance is needed to build capability?Interventions:- social protection- asset protection- income growthWhat are the challenges?Walk through iterative process of fully understanding the beneficiary as first step to effective HES design. Need to walk in the beneficiary’s shoes to understand their day to day lives in order to design effective HES…participants are the ideal group to do this as they know the realities facing the hhs they are working with….What do they need to do to build capability?Capabilities & Interests:EducationSkills - EmployabilityAction required:- persevere- organize- buildWhat are the interests & capabilities?
11 Poverty Tax Challenge“Poverty Tax” causes the poorest to pay the most to meet their basic & essential needsUnderstanding delivery and cost of basic servicesOpportunity to reduce the cost of basic servicesOpportunity to reduce the cost of inputs for income generating activities
12 Group Discussion: Households and ES Break into groupsDiscuss one household that you have previously supported with ES or that requires ESShare:What factors made them require ESHow they supported themselves financiallyWhat major risks/poverty taxes they faceHow they would deal with negative eventsFacilitate the group discussion. Ask one person from each group to share a particularly interesting household story. Bring out commonalities across the cases.
13 Important Concepts in ES Households often become poor after experiencing a shock (e.g. sickness caused by HIV)Vulnerability to shocks varies between households, within households and over timeHousehold livelihood strategies are shaped in part by vulnerabilityCoping mechanisms and safety nets are important to building resilience to shocksTailor interventions to vulnerability , capacity and risk toleranceWith support, households can transition along a pathway to graduation from external supportBuild on the discussions of specific households from the previous discussion in reviewing this slide. Refer back to it frequently in making new points to illustrate your meaning.Households have different levels of vulnerability to risk. This influences their livelihood strategies and their willingness to invest in new opportunities. It also influences the types of ES programming that are most appropriate for them. This is never static. It is an ongoing process. Households may move in and out of poverty due to shocks and coping mechanisms. It is critical to understand where your target households are before starting to work with them.Appropriate ES interventions vary for households and can be sequenced to encourage movement along a pathway out of poverty. It’s a process rather than being immediate.ES programming can be implemented in ways that do not create risk to the individuals, support the development of safety nets and link to household-level consumption smoothingEffective ES programming often requires combining pull interventions (creating new economic opportunities that are suitable for the participation of the poor) with push interventions (supporting vulnerable households to be able to access those opportunities).
14 Types of Coping Strategies Minor CopingModerate CopingSevere CopingSelling protective assetsSeeking wage laborMigrating for workBorrowingReducing spending and food consumptionDrawing on social assetsSelling productive assetsBorrowing at exorbitant ratesFurther reducing spending and food consumptionDepending on charity;Breaking up householdMigrating under distressGoing without food
15 Types of ES Interventions IncomePromotionIncome GrowthProtectionIncome StabilizationRisk ReductionProvisionLoss ManagementDestitute / DistressES interventions aim to reduce household vulnerabilityThree categories (though overlapping):ProvisionProtectionPromotionImportant here to discuss selection of interventions. Talk at about PPP at a high level as three categories of interventions, with overlap between them. Walk through how each of the PPP interventions is suitable to support the evolution of the household.LIVELIHOODPHASETime
16 HOUSEHOLD VULNERABILITY HOUSEHOLD LIVELIHOOD & FOOD SECURITY OBJECTIVESHIGHHOUSEHOLD VULNERABILITYLOWLOWHOUSEHOLD LIVELIHOOD & FOOD SECURITYHIGHPromotionExpand household income and consumptionSmooth household income and promote asset growthProtectionSmooth household consumption and manage household cash flowWalk through the objectives that can be supported at each level.Build self-insurance methods and protect key assetsProvisionRecover assets and stabilize household consumption
17 Current State of ES Programming A lot of poor practiceRequires specialized skill sets and expertise (just as effective health programs do)Traditionally, many ES activities have been implemented poorly, with untrained staff and have had limited resultsBudgets have often been insufficientSome interventions that are no longer widely practiced elsewhere (e.g. NGOs providing loans) are still widespread in ES programmingLimited learning from practices and experiences elsewhere
18 Common Problems and Effective Solutions in Economic Strengthening No demand for products produced by target households or no jobs availableConsult market assessments / labor market assessments.Balance “push” and “pull” interventions.Organization’s services end once the project’s funding runs out.Design approaches for sustainability of access to products and services from the beginning.Organizations provide services that they have no experience or capacity in (example: microfinance)Avoid areas with weak or no capacity.Engage in strategic partnerships .Projects repeat mistakes that have already been made elsewhereFocus on learning from other experiences prior to starting implementation.Share learning widely.Building on the current state of ES programming, we are presenting common problems and effective solutions. For each problem, first ask the group to brainstorm their own solutions. Facilitate a discussion on these before revealing the second column.For each solution, discuss why it is effective and provide an example.
19 Common Problems and Effective Solutions in Economic Strengthening Projects do not know their performance and only measure what donors require.Implement a results measurement system with baselines and regular monitoring.Same activities are provided to all target households, even though needs and capabilities vary.Tailor interventions to households.Households that improve their economic situation stop receiving services and subsequently relapse.Work to develop household resilience.Link graduates to new services to ensure incentive for graduation.For each solution, discuss why it is effective and provide an example.Ask the participants to identify other problems that they have faced. Then brainstorm solutions together for it.You can pass out the list of standards of practice after reviewing this list.
20 Food Transfers Cash Transfers Asset Transfers Labor Schemes Provision Objective: Recover assets and stabilize household consumption (food, healthcare, shelter, clothing, etc.)Food TransfersCash TransfersAsset TransfersLabor SchemesHaving reviewed overall good practices, we will now focus on better understanding various types of ES interventions.If there is limited time, have the participants select the interventions that they are most interested in and focus on those.Consumption support may not seem productive, but it may allow households to rebuild and maintain productive assets by helping to smooth consumption so they do not have to sell productive assets.Provisioning should be continued until they have developed appropriate protection strategies to ensure they do not end up in the same situation.
21 Provision – Food transfers Potential BenefitsCan avoid sale of productive assets.Allows income to be used for other purposesMay improve nutritional status, enabling productive activities.Potential ConcernsHording foodSale of food itemsIntra-household utilizationMarket impact (both locally and non-locally sourced)Administration and handling costsAsk what types of beneficiaries they think would best use these transfers. Where there are availability problems, where people are not physically able to go to market, where there are concerns about how cash transfers would be used, or about what types of food would be purchased with cash. Issues of local procurement.
22 Provision – Cash transfers Unconditional or conditional transfersPotential benefits:Can support consumption and investmentLow administration fees (if ongoing)Potential concerns:Unconditional transfers may be misusedCash safetyDifficult to monitor spendingLump sums may be overwhelming for beneficiariesFew suppliers who accept vouchersAsk: Are people who can manage cash transfers as vulnerable as those who require food transfer?Note the increasing trend toward cash rather than food transfers.
23 Provision – Cash Transfers: Conditional and Unconditional Potential BenefitsCan support consumption and investmentLow administration fees (if ongoing)Potential ConcernsUnconditional transfers may be misusedCash safetyDifficult to monitor spendingLump sums may be overwhelming for beneficiariesFew suppliers who accept vouchers
24 Provision – Physical asset transfers Common asset transfers:Livestock and poultrySeeds / seedlingsTools / machinesTypically requires a holistic look at the sectors related to the assetsPotential BenefitsCan generate incomePotential ConcernsSignificant training or prior experience is neededAsk: Are people who can manage physical assets as vulnerable as cash or food transfer recipients?Livestock and poultry; require significant investment in housing, feed and healthcare. Need to ensure linkages are in place. But may provide a relatively quick income stream for the beneficiary.Seeds and seedlings; useful when recovering from poor season; consider the cost of fertilizer, ability and willingness to farm and protect crops, time to maturity and yield. While fruit trees and other commodities may provide a higher income, the time to maturity and yield may be prohibitive.Tools and machines; consider whether they can afford the maintenance and upkeep; no point providing a tractor or grind mill if they cannot pay for the fuel or repairs.
25 Exercise:Discuss which provision strategy you would use in each of the following scenarios:Marginal, remote area is hit poor weather for consecutive years and agricultural households have little to eat. They are selling off agricultural equipment and livestock. There is limited availability of nutritious food in local markets for them to purchase.Households in urban areas have plenty of food options but no income to purchase it owing to the sickness or death of their primary wage earner.Encourage participants to point out what information they lack or would need to know.Ask the group about potential risks of provision strategies:No incentive to stop receiving them.
26 ProtectionObjectives: Build lasting self-insurance methods and protect key assets; Smooth household consumption and manage household cash flow.Financial safety nets(savings, microinsurance)Social safety nets(social capital, supporting institutions)Financial literacyExtending legal services(protecting assets and inheritances)Beneficiaries that have access to appropriate protection strategies will be better able to cope with shocks. However, some provision activities may also act as protection activities by helping smooth consumption and protect productive assets.If there is limited time, have the participants select the interventions that they are most interested in and focus on those.
27 Protection – Financial safety nets Financial safety nets help households smooth consumption to purchase goods and services, such as food and healthcare.Examples of financial safety nets include:SavingsMicroinsuranceBy accessing savings or insurance households are better able to protect their productive assets following a shock and therefore maintain current and future earning potential.
28 Protection – Savings Groups Savings enable the poor to self-ensureCash based savings provide liquid assets to smooth consumptionSavings groups are informal where small amounts can be saved and lent to membersWhat ways do they save? Physical assets.What problems are there with those types of savings? Illiquid, can become a liability rather than an asset, inflation decreases value of investmentWhat are some of the problems with VSLAs?
29 Protection – Savings Groups Potential BenefitsIncreases capital available for smoothing consumptionInterest paid on savings provides a return on investmentImproves social capital; collective bargaining and marketingGroup managed; they determine savings and lending ratesPotential ConcernsRequires income stream to ensure that households have money to saveRetro-fitting savings and loans to existing groups may be problematicWhat ways do they save? Physical assets.What problems are there with those types of savings? Illiquid, can become a liability rather than an asset, inflation decreases value of investmentWhat are some of the problems with VSLAs?
30 Protection – Burial Societies & Stokvels The vulnerable self-insure, which means they assume all the risk of a shock.Informal ‘insurance’ mechanism spreads the risk of a shock between the vulnerable and less vulnerable.Lessons learned:Important aspect is the social network which burial societies and stokvels are built. For example burial societies often assist addressing numerous shocks to the household, not just in time of death.Provide an excellent structure to disseminate information, products or services.What other agent models can you use? Cell phones, NGOs, etcConsider presenting the following case study: Health Care International – a Lagos based health maintenance organization, utilizing an agent model with an MFI.
31 Protection – Burial Societies & Stokvels Potential BenefitsProvide numerous services to cope with shocks via social networksImportant risk reduction strategyPotential ConcernsInformal management of fundsProtection – Burial Societies & StokvelsWhat other agent models can you use? Cell phones, NGOs, etcConsider presenting the following case study: Health Care International – a Lagos based health maintenance organization, utilizing an agent model with an MFI.
32 Protection – Strengthening Social Safety Nets Support increased access to existing social safety net programs that people can fall back on in times of need.Safety nets can be provided by government agencies, CBOs, and other community groups.Examples of social safety nets include several previously mentioned provision activities:Transfers, cash and in-kind transfers such as school supplies and uniformsFood-based programs such as supplementary feeding programs and food stamps, vouchers, and couponsFee waivers and exemptions for health care, schoolingImportant to raise the issue of the sustainability of safety nets…they are not all equal!
33 Protection - Extend legal protection Facilitating access to legal services helps protect control and access to protective assets. Work with legal service providers to:Help enforce inheritance lawsProtect asset ownership (e.g. land, housing)Questions to consider:What protection is there currently for widows and OVCs?Is there a need for advocacy to help enforce existing laws?How can social norms support formal legal protections?
34 Protection – Financial literacy The vulnerable often have inconsistent and variable income streamsFinancial literacy can be provided by external parties or directly by the NGOPotential BenefitsEnables better management of household cash flows, understanding profit and loss, and effective use of financial goods and services.Potential ConcernsTraining must be of adequate quality and duration to be effective
35 Linkages to formal credit and savings PromotionObjectives: Smooth household income and promote asset growth; Expand household income and consumptionLinkages to formal credit and savingsEnterprise development / value chain developmentWorkforce development (vocational and skills training)Target households:Have some assetsAble to take on higher risk activities.If there is limited time, have the participants select the interventions that they are most interested in and focus on those.With effective protection strategies in place, households are able to consider employing their assets in higher return (but riskier) opportunities to further increase their income. Initially, they may still be quite risk averse and engage in activities that only marginally increase income. One effective way to do this is to diversify income streams so that income is smoothed. Households may then look to continue to increase income through further riskier activities.Ask: Who would be the most appropriate for being involved in promotion?
36 Promotion – Formal savings and credit Microfinance is the delivery of appropriate financial products and services for the poor. It includes, savings, insurance and credit.Potential BenefitsCan support the development of viable livelihoodsPotential ConcernsRisks creating asset loss and indebtednessAccess to financial products and services, like loans, should not be a one off opportunity. The poor use access to savings and credit as working capital to purchase inventory.If savings and credit are provide once or on an inconsistent basis, then they may be forced to consume their inventory or other assets.
37 Formal savings and credit, continued Lessons learned:Ongoing access to finance is critical. Borrowers will generally want rising amounts and easy access.It is very difficult for NGOs to manage microfinance. Partnering with specialized agencies is advisable.Borrowers will often assume NGOs are providing loans as grants. Working with a formal credit provider increases the chances that loans will be repaid.Vulnerable households are often not attractive to lenders.Borrowers who are late on payments you provide often will not attend your other activities (such as trainings)Rather than providing finance, consider:Providing loan fund and operating costs to the MFICreating a loan guarantee fund to share the riskRevenue sharing with MFI and CSO
38 Promotion – Enterprise development Enterprise development includes linkages of microenterprises to business development services and technical servicesExamples:Identifying products, pricing, mappingMarketingBusiness registration and legal supportPotential BenefitsCan support the growth of new businessesPotential ConcernsNew services are not always economically viableExtended advisory services are important to ensure that businesses can continue to grow and cope with market changes and shocks.Often these services are provided by specialized for-profit providers as this ensures that the services are relevant and the training is appropriate quality.
39 Examples of promotion – Value chain development Value chain development addresses the constraints that prevent pro-poor growth of an industryExample interventions:Supporting linkages of firms to marketsSupporting improved technical capacityPotential BenefitsCan create large-scale and sustainable benefitsPotential ConcernsCan be costlyRequires significant technical expertiseExtended advisory services are important to ensure that businesses can continue to grow and cope with market changes and shocks.Often these services are provided by specialized for-profit providers as this ensures that the services are relevant and the training is appropriate quality.
40 Examples of promotion – Workforce development Most prefer employment to entrepreneurship.Access to employment can offer reliable livelihoods.Workforce development interventions could include:Apprenticeships and internshipsVocational skills trainingWorkforce readiness; preparing resumes, appropriate attire, tools and resources, skills trainingLessons learned:Ensure there are job opportunities before trainingLink trainees to employers from the beginningEnsure the quality of the training
41 Take-Home Tips for Effective ES Interventions! XYZOptional, if there is time.First ask the group to contribute their suggestions. Write these up on the board and ask others to agree or disagree with each. Then add others that have not been mentioned.
42 Take-Home Tips for Effective ES Interventions! Focus on capabilities not income-levelSpace for the resourceful and innovativeGroup vs. individuals interventionsTraining has to be tailored to recipients’ capabilitiesOptional, if there is time.First ask the group to contribute their suggestions. Write these up on the board and ask others to agree or disagree with each. Then add others that have not been mentioned.
43 Take-Home Tips for Effective ES Interventions! Program design must take into account differing levels of povertySubsidies should be ‘SMART’ and have a clear, finite, facilitative applicationThe way you enter is the way you exitContinually link activities to further capability building opportunitiesOptional, if there is time.First ask the group to contribute their suggestions. Write these up on the board and ask others to agree or disagree with each. Then add others that have not been mentioned.
44 Quiz!Select eager participants to engage in a quiz. This can be set up like jeopardy so that they have to buzz in to give their answer. Bring prizes to distribute to the winning individual!Sample Questions:Is the following an example of a conditional or unconditional transfer?Should NGOs directly offer credit? Why or why not?Name three types of protection interventions.
45 Next Steps and LIFT Support Continue to be a resource to USAID/Lesotho and PEPFAR implementing partners on ES/L/FS activities and linkages between NACS and ES/L/FS activities.Continue to work with MSH, ASSIST (URC) FANTA-3 (FHI 360) to tailor potential linkages between Nutrition Assessment, Counseling and Support and ES activities to the Lesotho context.
46 Additional Resources MicroLinks (www.microlinks.org) CGAP (www.cgap.org)CYES Network (www.cyesnetwork.org)SEEP Network (http://www.seepnetwork.org)Savings Revolution (www.savings-revolution.org)Here are links that you can use to follow up on what we’ve discussed today.
47 Thank you! John Fay Consultant email@example.com Jacky Bass Project DirectorAdditional Information and Resources can be found at: