Financial Pathways toward Greater Resilience and Economic Inclusion

Facilitating access to financial services is a core component of most economic inclusion programs, which aim to build resilience and create opportunities for poor and vulnerable households. These programs offer a comprehensive package of interventions, such as cash transfers, coaching, and business capital, to address the constraints preventing poor and vulnerable people from effectively coping with and recovering from shocks and accessing job opportunities.

Understanding the barriers to financial inclusion and the specific needs of poor and vulnerable people is essential for tailoring products that create value for them and effectively contribute to their resilience. Core components of economic inclusion programs can be adapted to provide better pathways for greater resilience. This paper offers insights into how financial services facilitated in economic inclusion programs can better contribute to resilience building.

First, it discusses how financial services can be designed to meet the needs of different participants and how synergies can be fostered between the financial inclusion components and other components to achieve greater financial inclusion and resilience.

Second, the paper delves into how collaboration with financial service providers or market facilitators and leveraging digital technology can help achieve financial inclusion and resilience-building outcomes. Third, the paper offers recommendations for economic inclusion practitioners seeking to strengthen the financial inclusion components of their programs and financial inclusion practitioners aiming to complement their interventions to enhance the resilience of the most vulnerable microfinance clients.

Written by Serena Stepanovic, Inés Arévalo-Sánchez, Vidya Diwakar, and Dan Gilligan

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World survey on the role of women in development 2024: Harnessing social protection for gender equality, resilience and transformation

The “World survey on the role of women in development” is presented every five years to the Economic and Financial Committee of the United Nations General Assembly. It provides a unique opportunity to put gender equality issues on the economic policy agenda and bring together perspectives on human rights and sustainable development.

This ninth edition (UN document A/79/111) takes stock of progress, gaps, and challenges in building comprehensive, gender-responsive social protection systems. It provides examples and recommendations on how these systems can better protect women and girls from poverty and deprivation, strengthen their resilience to shocks, and transform social norms, structures, and institutions that keep them from realizing their full potential.

To produce the report, UN Women brought together researchers, policymakers, civil society actors, and UN system partners. The report draws on their collective expertise to provide guidance to policymakers and support advocacy for a new generation of gender-responsive social protection systems equipped to uphold rights and advance sustainable development.

Vidya Diwakar made important contributions to the report, particularly through informing Chapter 1, section C, alongside a forthcoming background report.

Read the report here

“We will die in poverty before dying by COVID”: Young adults and multilayered crises in Afghanistan

Afghanistan experienced an extraordinary situation in 2021 that presents a complex example of how an intensified level of conflict and the global COVID-19 pandemic of added to an increasing prevalence of drought due to climate change has been affecting people’s livelihoods from different angles. In pre-August 2021, the country experienced record-level violence across the provinces. This was followed by the gradual fall of districts, provinces and finally the capital Kabul into the hands of the current de facto authorities, the Taliban.

Meanwhile, like any other part of the world, Afghanistan also experienced the impacts of the COVID-19 pandemic, which hindered people’s access to jobs, health care and different sources of revenue. Alongside this, the second-worst drought in 4 years (IFRC, 2021) has widely affected the livelihoods of the majority of people who rely on agriculture and livestock as the sole source of income.

There has been limited research into how these situations have combined to affect livelihoods and wellbeing in Afghanistan. This article attempts to advance understanding of this issue and promote research that investigates overlapped crises.

Read the full synthesis paper here.

Education, conflict, and resilience in Sub-Saharan Africa: Report

The Sustainable Development Goals call for action in many areas relevant for girls and boys, not least quality education, but challenges in achieving progress may be aggravated by factors including poverty and armed conflict. Conflict has negative impacts on education, which can operate through a variety of supply- and demand-side channels. It can destroy infrastructure, displace students and teachers, and modify the returns to schooling, all of which can limit school enrolment (e.g. Akresh and de Walque 2008; Dabalen and Paul 2014; Serneels and Verporten 2012; Poirier 2012; Bertoni et al. 2019). Even in countries where primary school enrolment rates may be increasing, conflict can widen disparities in education access and contribute to the intergenerational transmission of poverty.

In this context, strengthening resilience capacities that can enable children living in conflict-affected areas to continue to access education is critical. USAID’s 2018 Education Policy recognizes that in order to strengthen resilience, “education in partner countries must have the capacity to embed effective approaches to improving learning and education outcomes, to innovate, and to withstand shocks and stresses” (USAID 2018, p. 17). Conflict is generally not a “shock” but more a social process, reflecting something structural and with a long time-dimension (though a single conflict event and its impact may be experienced as a shock locally). The ability to access education in contexts of protracted crises is critical.

This report examines the links between conflict, education, resilience and poverty dynamics in sub-Saharan Africa in a set of USAID Resilience Focus Countries. It relies on panel data from Ethiopia, Malawi, Niger, Nigeria, Uganda, and the Democratic Republic of Congo (DRC) to investigate the relationship between conflict and education, focusing on girls and boys in households on different poverty trajectories (see Box 1). It then builds on Diwakar et al. (2021) to examine the types of resilience capacities that can promote school access for children in conflict-affected areas. In doing so, the paper attempts to contribute to the knowledge base on the pathways through which conflict affects education differently for girls and boys in households on different poverty trajectories, and how resilience capacities of households and institutions can be supported to contribute to increased enrolment in situations of conflict and violence.

Author: Vidya Diwakar

The full report can be downloaded here

The associated brief can be downloaded here

Education, resilience and sustained poverty escapes: Synthesis Report of Sub Saharan Africa

Resilience is defined as the “ability of people, households, communities, countries, and systems to mitigate, adapt to, and recover from shocks and stresses in a manner that reduces chronic vulnerability and facilitates inclusive growth” (USAID 2012, 5). While there have been important gains in poverty reduction internationally over the last two decades, there is a concurrent recognition that without nurturing resilience, these gains are fragile and may risk reversal in a multi-hazard context. Developing resilience is arguably a central component of ensuring sustained poverty reduction. A key way in which resilience can be strengthened is through education. In turn, resilience capacities can improve education outcomes. Combined together, sets of resilience capacities have the potential to contribute to sustained poverty reduction.

This paper analyzes this interrelationship between resilience, education, and sustained poverty reduction in sub-Saharan Africa. It synthesizes mixed-methods research by the Chronic Poverty Advisory Network (CPAN) to contribute to this knowledge base by focusing on data from Tanzania, Rwanda, Niger, Malawi, Ethiopia, Uganda, and rural Kenya, drawing out regional conclusions where possible, while also exploring country-level and intra-country differences. This study adopts a resilience framing to examine the potential for sustained development gains through poverty reduction, within a multi-hazard context. It focuses on the role of education as a resilience capacity, and other capacities improving education outcomes—both of which operate primarily at the adaptive and absorptive level (see Figure 1 and Table 1). It recognizes instances when education as a resilience capacity combines with certain resilience capacities improving education outcomes, which can have a transformative potential to drive escapes from poverty that are sustained over time.

Authors: Vidya Diwakar (Overseas Development Institute) and Marta Eichsteller (University College Dublin), with Andrew Shepherd (ODI).

The full report can be downloaded here

The associated brief can be downloaded here

A Qualitative Understanding of Poverty Dynamics in Zambia

This qualitative study, carried out from 2019 to 2020, describes poverty trajectories in Zambia, with a strong focus on the post-2010 period and on sustainable escape from poverty. There is limited qualitative research in Zambia on assessment of poverty dynamics that encompasses both drivers that support sustainable escapes from poverty and drivers of poverty descent. The importance of understanding these poverty dynamics, their geographical distribution and trends over time, as well as how they respond to policies and programmes, cannot be overemphasized. 

Under the leadership of Chronic Poverty Advisory Network (CPAN), and with funding from DFID, a research partnership between Zambart, LSHTM (UK), INESOR and CPAN conducted this qualitative component that was part of a broader study of Zambia Poverty Dynamics. The other broader study components included the analysis of two sets of survey data, namely the Rural Agricultural Livelihoods panel survey 2012-2015-2019 and the Living Conditions and Monitoring Survey 2010 & 2015. This was carried out by IAPRI (RALS) and INESOR (INESOR) respectively. Two other components provided modelling forecasting of poverty up to 2060, led by the University of Denver, and a political economy analysis, led by SAIPAR.  The mixed methods findings across all components are presented in a national report (see Shepherd and Bond et al., 2021). This report focuses on the qualitative component.

Authors: Virginia Bond, Joseph Simbaya, Chiti Bwalya, Lucia da Corta, Arthur M Moonga, Monde Mwamba, Lwiindi Gwanu, Marta Eichsteller, Phillimon Ndubani

Read the full report here

The role of agriculture in poverty escapes in Kenya – Developing a capabilities approach in the context of climate change

Rural poverty poses a significant developmental challenge in Kenya. Using a panel survey in rural Kenya and qualitative material from focus groups and life history interviews from the regions of Makueni and Vihiga, we investigate the changing role of how agriculture and farming practices have contributed to sustained escapes from poverty since 2000. In this study we analyse environmental, social and personal structures that facilitate conversion of agricultural strategies that enable poverty escapes in the context of climate change. Our study identifies that agriculture still forms an essential aspect of Kenyan households’ economic and social wellbeing. However, the study results indicate that links between accumulation of assets and poverty escapes are ambiguous, poor households find it problematic to convert agricultural strategies into a profit, and climate change shocks further exasperate these difficulties. We argue that constraints in conversion structures, such as limited infrastructure, and in conversion processes such as ongoing difficulties in land procurement and inheritance, unsustainable farming practices and continued lack of knowledge on climate-smart agriculture affect not only poverty escapes, but also the ability to adapt to and mitigate against environmental shocks. Development of conversion processes to improve existing conversion structures should be at the core of public interventions that seek to sustainably reduce poverty amidst climate change in rural Kenya.

This publication was authored by CPAN partners Marta Eichsteller, Tim Njagi, and Elvin Nyukuric, and was published in World Development journal.

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Understanding the dynamics of poverty in Rwanda

Overview

While poverty rates in Rwanda have fallen significantly since the 2000s, the latest estimates reveal a slowdown in the poverty reduction rate. This calls for a better understanding of poverty and poverty dynamics in the country. In this paper, we use the latest three waves of Rwandan panel data, collected in 2010/11, 2013/14 and 2016/17, to characterise the dynamics of poverty in Rwanda and explain the slowdown in poverty reduction. Our results show that education, health insurance, diversification of occupations within households and savings all promote escape out of poverty and prevent impoverishment. The Girinka Programme acts as a lift out of poverty, while business creation has protective effect against impoverishment. Observed trends of these variables, especially the increase in households depending on agriculture wages and the reduction of business owners at the household level, appear as important factors in the slowdown in poverty reduction in Rwanda.

Authors: ODI & IPAR

Download the paper here