Empowering Women Through Unconditional Cash Transfers

Empowering Women Through Unconditional Cash Transfers

By Diana Akullu Wanyama and Jimmy Ebong

What would you do with an extra Ushs200,000 (USD 53) in your pocket? Would you load up on groceries, top up on that pending payment for school fees, or pay back that small loan you obtained last month? For many women in low-income countries, including Uganda, that extra cash potentially allows them to go beyond simply meeting their basic needs to starting new economic activities or reinvesting and growing the existing ones. It can mean the difference between having enough to consume or sufficient to consume, save, and invest.

This year’s International Women’s Day 2024 theme is “Invest in Women: Accelerate Progress”. The subject is particularly relevant for Uganda, where women make up more than half of the population, 46% of whom constitute Uganda’s labour force but for whom the median monthly wage is UShs130,000 less than that of men. Women are primarily engaged in the informal sectors where their earnings, job quality, and security lag that of their male counterparts. For instance, although 70% of Ugandan women are employed in the agricultural industry, they own less than 20% of the sector’s output. Low earnings render women’s livelihoods and households highly vulnerable and economically constrained especially during emergencies.

There is growing evidence from research that backs the use of cash transfers as a tool to alleviate poverty and increase women’s economic empowerment. Cash transfers are cash disbursements made without rules or conditions for use. Well-thought-out cash transfer programmes are crucial because they enable beneficiaries to meet basic needs, access essential services such as healthcare, or invest in income-generating activities.  Studies have drawn a path between the increased ability to meet crucial needs and increased self-confidence, self-efficacy, and financial autonomy in women, leading to empowerment.

In 2023, the Financial Sector Deepening Uganda, in partnership with TradeMark Africa and 100WEEKS, participated in an initiative to provide informal cross-border women traders at the Elegu border town with unconditional cash transfers alongside training in business and entrepreneurship. The project aimed at offering relief to women cross-border traders whose trade suffered due to the closure of borders and nationwide lockdowns at the height of the COVID-19 pandemic and lost their businesses and incomes. Relief in form of a cash transfer was disbursed to just over 500 women in three instalments. Each woman received a total of Ushs571,658 (USD153). The women also could voluntarily attend any of the three financial literacy trainings provided.

While short-term, the project resulted in some positive gains. The cash transfers enabled the women to access basic needs, including food, school fees, and medical services. Annet Katushabe, a wholesale trader at Elegu town, attests to this benefit: “When I received the money, my children were on the verge of being chased from school due to outstanding fee balances. I paid half of the amount for their school fees. I utilised the remainder of the money to buy pesticides for my garden, where I plant crops for sale. I also bought a rooster to add my existing flock of chickens and saved some money.”

Irene Adong, another cross-border trader dealing in cereals, and legumes, reported; “I used the money to increase the stock of items I sell so that I have most of the items my customers ask for. My income has increased so much that I can save up to Ushs150,000 (USD 40) a week. This is a big increase from the Ushs20,000 (5 USD) I used to save weekly”.

Women already engaged in entrepreneurship were more likely to use the cash to diversify their economic activities or expand their businesses. Interestingly, on average, 40% of the women attended the three trainings despite its non-mandatory nature. The cash likely increased their access to basic needs, reducing survival stress and opening them up to capacity-building opportunities.

A key challenge was that over 80% of the women did not have a national ID card or a mobile money account in their names. They had to recruit a sponsor to receive the money on their behalf. A national identity document is increasingly necessary to access government and financial services. To close the gender gap and increase women’s economic empowerment, targeted interventions are still needed to ensure that every Ugandan, including those outside urban areas, has access to a national identity card.

In conclusion, unconditional cash transfers are a valuable tool to improve women’s livelihoods, productivity, and empowerment. The transfers enhance access to basic needs, reduce their survival stress, opens them up to learning opportunities, and enables them to save and invest. A small investment can mean the difference between earning enough to consume and enough to consume, save, and invest. Policymakers and development practitioners should consider cash transfers as one of the tools they can deploy to alleviate poverty and advance women’s economic empowerment, even as they consider cultural and social contexts for implementation.

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Measuring Women Financial Inclusion Toolkit for Uganda

Measuring Women Financial Inclusion Toolkit for Uganda

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    The gender gap in account ownership has significantly narrowed in Uganda. In 2021, approximately 65% of women had an account at a formal financial institution or a mobile money account, compared to 67% of men, according to Findex data. It positions Uganda as one of the countries with the lowest gender gaps in Africa. However, despite this progress, significant disparities in account usage persist. For example, women are more likely than men to rely on informal institutions for savings and borrowings.

    Several gender-specific barriers contribute to this situation, including prevailing gender norms, limited access to and control over economic resources, lack of knowledge, geographical and technological constraints, and stringent loan requirements. Reliable and comprehensive gender data is needed to gain in-depth understanding of gender disparities, inform policy and program development and monitor progress, better address the women segment as customers and support advocacy for gender equality.

    This toolkit aims at providing practical tips to measure women financial inclusion in Uganda using a four-fold approach

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    What does it take to make digital credit gender inclusive?

    What does it take to make digital credit gender inclusive?

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      Digital lending is expanding rapidly across markets with significant mobile money or mobile banking penetration. And as with all financial services, access and utilization patterns differ by gender. Some digital lending may have the potential to overcome gender biases. For example, borrowers can request a loan from anywhere, avoiding some transaction costs that are particularly burdensome for women. It can standardize processes to avoid the human biases of loan officers. Lenders can work around gender biases stemming from the use of titled land as collateral by assessing creditworthiness on alternative data sources such as cash flows.

      But digital lending can still suffer from inequities. Women may have less access to smart phones, run smaller businesses deemed ‘unworthy’ by some lender, or lack certain forms of KYC required for applications. They may be more likely to struggle navigating a smartphone app on their own. And if the product itself wasn’t designed with women in mind, it may be a poor fit for their borrowing needs.

      How can digital lenders be conscious of the range of gender issues that might be at work and adapt their practices to be attractive and useful for women? FSD Uganda and the FSD Network Gender Collaborative Programme explored these issues through a partnership with a digital lender in Uganda from 2021-2023. FSD Uganda was simultaneously working with this lender to expand the pool of capital available to women borrowers in the aftermath of Covid and the Ebola outbreak by providing the lender a US$100,000 returnable grant specifically earmarked for on-lending to women’s businesses. We supplemented this with a targeted piece of research that involved reviewing existing gender data and interviewing male and female customers to identify where there might be opportunities for this lender to be more gender inclusive.

      The results point to both specific things this firm is doing right and where they might improve, while also providing a framework for how other firms might review their own data and practices in an effort to be more gender intentional.

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      Rapid Gender Assessment of the Horticulture and Dairy Value Chains in Uganda

      Rapid Gender Assessment of the Horticulture and Dairy Value Chains in Uganda

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        A rapid assessment to obtain insight into women’s economic opportunities within the dairy and horticulture value chains was commissioned by the FSD Network Collaborative Gender Programme to support FSD Uganda.

        This report presents insightful findings from the literature reviewed and a field study conducted in selected districts across the tomato and dairy value chains in Uganda. The report provides an overview of the transformative potential on rural women’s livelihoods per value chain, and further explores interventions supporting women to achieve greater resilience, increase their income and exercise greater decision-making.

        The findings of this report will aid development of interventions in line with FSD Uganda’s mandate, under which it works with both public and private sector players, to develop sustainable improvements in the livelihoods of low- income individuals (particularly women) through reduced vulnerability to shocks, increased incomes, and employment creation.

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