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FEATURE STORY November 15, 2018

The Story of Takaful and Karama Cash Transfer Program


Egypt has made investment in people a top priority, as it believes that investing in its human capital is integral to the country’s overall development. Accordingly, the country’s ambitious economic reform program launched in 2014 -  which included removal of energy subsidies, the adoption of a flexible exchange rate and the introduction of a new VAT tax -  was coupled with efforts of scaling up social protection programs. Those programs aimed to mitigate the potential short-term, negative impacts of the reforms on the most poor and vulnerable segment of Egypt’s population. The efforts included expanding social safety coverage and increasing the amounts on the food subsidy card.

The Takaful and Karama conditional and unconditional cash transfer program is among Egypt’s largest investments in human capital development. The name of the social safety net program translates to ‘’Solidarity and Dignity’’ and was launched in 2015 with the support of a US$400 million World Bank program. The Takaful and Karama program is implemented by the Ministry of Social Solidarity and has covered to date 2.26 million households which amounts to approximately 9.4 million individuals, or approximately 10% of Egypt’s population.   


 ‘’Takaful’’ or ‘’Solidarity’’ provides conditional family income support aimed at increasing food consumption, reducing poverty while encouraging families to keep children in school and providing them with needed health care. Along with ensuring vulnerable families receive basic nutrition, the goal is to build the ‘human capital’ of the next generation and give them a path out of poverty. The program is ‘conditional’, meaning that households receive a monthly transfer of 325 Egyptian Pounds (EGP) providing they are compliant with certain clearly defined requirements. These include all household children ages 6 to 18 having at least an 80% school attendance record, four visits per year to health clinics by mothers and children below the age of 6, maintaining child growth monitoring records, and attending nutrition awareness sessions. The sessions help promote   better child feeding practices, regular immunizations, and antenatal and postnatal care of women. Households are given additional support for every 0-6 years old child (60 EGP) primary student (80 EGP), preparatory stage students (100 EGP) and Secondary stage students (140 EGP).  The program covers a maximum of 3 children per household and recertifies beneficiaries every 3 years. There are 1,962,785 households enrolled in Takaful (which amount to approximately 8,341,836 individuals or 87% of the program’s total households).

The ‘’Dignity’’ or ‘’Karama’’ part of the program aims to protect Egypt’s poor elderly citizens above 65 years of age and citizens with severe disabilities and diseases as well as orphans. These vulnerable citizens receive a monthly pension of 450 EGP with no ‘conditions’. The original pension amount was 350 EGP but recently got increased to 450 EGP to enable beneficiaries to cope with price hikes. A new functional disability assessment model has been rolled out across Egypt, moving away from a purely medical approach to disability to a more rights-based model, to determine Karama eligibility. Karama beneficiaries, have reached 306,016 households (which amount to approximately 1,300,568 individuals or 13% of the program’s total households.) Out of Karama beneficiaries, 52,338 (17%) are elderly, 252,338 (82%) are disabled and 1,668(1%) are both elderly and disabled.

Of the households enrolled in the Takaful and Karama program, 1,998,280 are headed by women (or 88% of all households), while 270,521 are headed by men (or 12%).


The Takaful and Karama Program is closely aligned with the World Bank’s recently launched Human Capital Project, which is built on the belief that investing in people through nutrition, health care, quality education, jobs and skills  is key to ending extreme poverty and creating more inclusive societies. The Human Capital project aims to build demand for more and better investments in people, help countries strengthen their human capital strategies and investments for rapid improvements in outcomes, and improve how human capital is measured.

Mervat is a ‘’Takaful’’ beneficiary who said that her husband is struggling to make ends meet and yet is still doing his best to guarantee that their children get educated. ‘’I have children in different stages of Education’’ said Mervat’s husband, ‘’ this is what really urged me to apply to the ‘’Takaful’’ program.’’ Mervat added that ‘’since I received the ‘’Takaful’ transfer, I paid pending tuition fees for my children. I still have EGP 300 which I spend on my family as needed.’’    

Hussein Darwish, a construction worker in Upper Egypt, is one of many ‘’Karama’’ beneficiaries. Hussein uses the pension to support his eldest son Alaa, who became fully paralyzed at the age of 8 years old. ‘’I lift building materials for a living’’ said Hussein. ‘’If one day passes and I don’t work, I will have to borrow money to buy my son’s medication.’’ Hussein explained that he receives his Karama pension through an electronic card.

Mastoura is another Karama beneficiary. ‘’ I was examined by the general medical board and was diagnosed with a high stage of fibrosis. I also suffer from hepatomegaly and splenomegaly.  So, they decided that I need a ‘’Karama’’ pension’’ said Mastoura’I got my EGP 350. I paid 250 EGP for my medical examinations and bought a kilo of meat for my children with the rest of the money.’’ said the mother in her early forties, who is from one of Upper Egypt’s poorest areas.  

  • Studies  show that there is an increasing global focus on social protection. This was particularly evident in 2015 when – for the first time- social protection became a part of the United Nation’s global ‘’Social Development Goals’’ agenda. In light of that, current high-income countries on average spend 1.9 % of Gross Domestic Product (GDP) on social safety net programs, while developing countries spend 1.5% of GDP and   Middle East and North Africa region countries spend 1.1% of GDP.  It is worth noting that even within the ongoing efforts of scaling up social protection in Egypt, the country’s spending in this realm remains well below the regional average, this is an opportunity to explore possibilities of further enhancing the ongoing social protection efforts. The Takaful and Karama program is a part of the global trend toward greater investments in social protection and is designed and implemented in accordance to international best practices of conditional and unconditional cash transfer programs.

Capitalizing on the Takaful and Karama database, the Ministry of Social Solidarity is linking beneficiaries to other integrated packages of social protection services including:

  • Providing food ration cards, if they do not exist for any Takaful or Karama household in cooperation with Ministry of Supply and Internal Trade 
  •  “Two is enough’’ program, in cooperation with Ministry of Health and Population. The program targets   families who have two children to stop at two, through availing subsidized access to birth control and awareness raising.
  • The “No illiteracy with Takaful” program focuses on eradicating illiteracy for Takaful women beneficiaries in cooperation with the Ministry of Education and Technical Education.
  •  “Sakan Kareem” or Decent Housing program is implemented in collaboration with the Ministry of Housing, Utilities and Urban Communities as well as civil society organizations focusing on improving home conditions for the very poor/vulnerable households under the program; including roofing, flooring, and water connections.
  • “First 1000 days program” is implemented by the Ministry of Social Solidarity in collaboration with the World Food Program. It focuses on the ‘first 1000 days of life’ of an infant as it is a critical period for brain development, body growth and having a strong immune system. The program targets the health and nutritional status of mothers and infants in the under developed governorates of Upper Egypt through providing access to nutritious food baskets at 94 EGP per month and ante and postnatal care along with nutrition education and community awareness.
  • The Forsa or ‘‘Opportunity” program, which is currently under expansion and targets the Takaful and Karama database. The program focuses on economic empowerment through diverse economic inclusion interventions (such as job placement, asset transfer, training and skills development). 

Based on the success of the program to date, the government is considering consolidation of the Takaful and Karama program to increase the operation’s efficacy through putting more emphasis on implementing and monitoring education and health conditionality to ensure that the transfers are directed to those who are truly in need. There are also plans to focus on moving from ‘’protection’’ to ‘’production’’, meaning that it will work to expedite the beneficiaries’ graduation from the program through enabling them to generate their own sustainable livelihoods.