Malawi’s poor households get financial boost to improve productivity

March 26, 2015

Washington, March 26, 2015 - The World Bank Group’s Board of Executive Directors today approved US$75 million in continuing support for the Fourth Malawi Social Action Fund (MASAF IV) to help reduce poverty levels for about five million poor Malawians by providing work opportunities, cash transfers, and grants to raise household incomes.

The US$75 million financing brings the amount committed to the Strengthening Safety Net Systems Project otherwise called MASAF IV to US$107.8 million. Today’s additional financing provided by the International Development Association (IDA*), consists of a US$68.2 million grant and a US$6.8 million credit. The original amount of US$32.8 million was approved by the Board in December 2013.

These additional funds will help fill a financing gap to help the Government strengthen its social safety net delivery system to reach the poor with the much needed support to help them take a step further out of poverty,” says Ms. Laura Kullenberg, Country Manager for Malawi. She adds that MASAF IV will not only address household poverty but will help create community assets, strengthen the Government’s capacity to respond to vulnerability and crisis, and develop a unified registry of beneficiaries to be used by all social protection providers.  

MASAF IV has three components, namely, productive safety nets, systems and capacity building, and project management. The productive safety nets component is the largest and will utilize 88 percent of the additional financing. It will cover three types of safety nets. First is the productive community driven public works that would enable targeted poor households earn an income during the rounds of the program implementation while creating assets for their communities. The second safety net will be grants provided through the already popular community savings and investment promotion (COMSIP) groups to help households increase their incomes and assets. This will also come with skills training. The third type are social cash transfers targeting the most vulnerable and labor-constrained households. The cash transfers will build on already existing experience of the Government and other donor partners.

Malawi’s Minister of Finance, Economic Planning and Development Honorable Goodall Gondwe applauds the additional financing as a timely leverage to Malawi’s poverty response. “This MASAF IV funding goes to the heart of government’s thinking in cushioning the poor and improving the livelihoods of the most vulnerable as it significantly contributes to most aspects of our national social support program,” he said.

The World Bank’s Team Leader for MASAF IV, Mr. Peter Pojarski says interventions for MASAF IV build on the success of previous tools such as COMSIP and will be based on an improved targeting system and mapping of activities to appropriate categories of the poor to ensure those most in need are reached. For example, cash transfers will be for the ultra-poor while public works are for the poor who are not labor constrained. MASAF IV is being implemented by the Local Development Fund Technical Support Team. The project is expected to close on June 30, 2018.

About IDA

* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change for 2.8 billion people, the majority of whom live on less than $2 a day. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $18 billion over the last three years, with about 50 percent going to Africa.

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