Two months ago, Claris Pendo’s days always followed the same routine. She would rise early, sharpen her tools, walk several kilometres to the forest, cut down a tree, drag it back to her village in Kenya’s Kilifi county, chop it into smaller pieces, dig a pit, cover the wood with soil and branches, and set it alight. Then she would go home and prepare a simple meal of ugali (Kenya’s maize staple).
She would keep returning to the pit until the wood had carbonised – a process that can take days – then pack the charcoal into sacks and wait for people on motorbikes to come and collect it. Then she would start all over again.
Now five months pregnant, Pendo, 35, says she hasn’t burned charcoal for two months, after receiving a cash transfer of 110,000 shillings (£660). Instead, she grazes the livestock she bought with the money – six goats and two cows. “I feel much better. This will be my seventh child, and it is the first time I feel certain my baby will be properly nourished,” she says from the yard of her home in the village of Unaya Ndogo.
A study published in August by the National Bureau of Economic Research which looked at the impact of unconditional cash transfers found that they reduced infant mortality by 48% and under-five mortality by 45% in rural Kenya – effects rivalling those of vaccines or antimalarial drugs. The study looked at the period between 2014 and 2017 when the NGO GiveDirectly sent payments of up to $1,000 (£740) to 10,500 households in more than 650 villages in Kenya.
“The problem with big aid organisations is that their approach is based on training and advice,” says Miriam Laker-Oketta, a Ugandan doctor and senior research adviser at GiveDirectly. “They tell people what to do and how to spend their money. But whether in Uganda, Yemen, India or the US, 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.”
On 8 August, Samini Kazungu, who also lives in Unaya Ndogo, lost her baby during childbirth. At 32, she already had four children, but an infection in her womb meant the fifth didn’t survive. “I went to the dispensary for weeks, but the treatment didn’t work,” she says.
Kazungu lives in a small mud-brick house she built herself. During her pregnancy, she continued to tend her small maize and cowpea plot – a task she describes as “exhausting”.
But her life changed on 16 August, when GiveDirectly transferred 55,000 shillings (£315) into her M-Pesa account, a mobile money system widely used in Kenya. In early September, she received a second transfer for the same amount.
Kazungu says the money allowed her to pay the 5,000 shillings needed for postnatal treatment after the stillbirth – uterine cleaning and medication – something she says “wouldn’t have been possible without it”. With the rest, she bought clothes for her children, food, livestock, a motorcycle and a piece of land.
The August study highlighted how financial support reshaped women’s daily lives, cutting back on the time they spent working and allowing them to focus on the wellbeing of their newborns: “The transfers resulted in a substantial decline of 51% in female labour supply in the three months before and the three months after a birth, and improved child nutrition,” the authors said.
At Gandini dispensary, a small health centre near Pendo and Kazungu’s homes, nurse Joyce Ndame notes a decline in the main complications she used to see at the clinic. “Respiratory tract infections caused by charcoal burning have gone down because women have switched to other livelihoods,” she says.
“What we’re seeing is that poverty was the barrier keeping these women from resting during pregnancy. As soon as they got the money, they did what was right for them. They are responsible for the nearly 50% reduction we’ve seen in infant and child mortality,” says Laker-Oketta, a mother of three whose experience as a doctor led her to work on the project.
Edward Miguel, professor of economics at the University of California, Berkeley, and co-author of the study, says: “Initially, the programme was focused on understanding the broader economic impacts of cash transfers. But later we thought it would be interesting to study their effects on health.”
The study found the transfers had improved diets and made health facilities more accessible for families, and also that the money had an impact on the wider community. Another study in 2022 found: “Local businesses in areas receiving more cash transfers also experienced meaningful revenue increases, in line with higher household spending.” For every dollar injected into the local economy, GDP rose by $2.50. “It was a very unusual finding,” says Miguel.
In Lukole, a village where many have received the cash transfers, shopkeeper Elias Mweni, though not a recipient himself, says that his sales have doubled. “I now stock more beans, sugar, oil and cereals, and people have even started asking for rice and pasta, which they couldn’t afford before.”
Benson Kazungu, says cash transfers helped him expand his clothing sales: “I used to have stock worth 5,000 shillings. Now it is 30,000 (£170).”
The idea of cash transfers is not new, but it is gaining traction. In Kenya, the main national programme, Inua Jamii, provides 2,000 shillings (£11) a month to 1.7 million people living in poverty.
In South Africa, a programme of cash transfers during Covid has also been hailed a success. Kate Orkin, from the Centre for the Study of African Economies at the University of Oxford, worked with the South African government to design a monthly grant for 10.5 million unemployed people during the pandemic, when lockdowns triggered mass layoffs and deepened poverty.
“The programme rollout was a dramatic achievement – the infrastructure was built in less than a month and 10 million people were enrolled online in five weeks in 2020.” The project also led a new unemployment grant. “In one of the world’s most unequal countries, the grant is now keeping 3.8 million people each month above the food poverty line,” Orkin says.
With global aid budgets shrinking – a recent analysis in the Lancet predicts that USAID cuts could result in more than 14m additional deaths by 2030, a third of them children – and major health initiatives under threat, Laker-Oketta thinks it is time for a paradigm shift in the aid system. “Not advice. Not training. Just money with no strings attached,” she says.
Pendo and Kazungu say that after receiving the money, they immediately thought about investing in projects that could bring long-term security. “I’m reinforcing my house with better materials. And since I bought livestock, I have a food security I never enjoyed before,” Pendo says.
“Now our diet includes beans and vegetables, when before we only ate ugali. I also bought a bed, and next I’ll build a new house, because the one we live in is collapsing,” adds Kazungu.
