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WB/Honduras: Increased Access to Health and Education Services for 1.5 Million People in Extreme Poverty

March 31, 2015

US$25 million loan seeks to reduce secondary school abandonment rate and fight poverty in indigenous and drought-stricken areas such as the Dry Corridor

WASHINGTON, March 31, 2015 – The World Bank Board of Executive Directors today approved a US$25 million credit in additional financing for the Social Protection project, in support of Honduras’ Bono Vida Mejor [Better Life Voucher] Conditional Cash Transfer Program. The financing seeks to guarantee access to preventive health and education services among 1.5 million Hondurans, or around 300,000 families living in extreme poverty.

The additional financing intends to guarantee conditional cash transfers through late 2017; strengthen the social protection program and expand its coverage to include 100,000 new beneficiaries (20,000 families) in other areas of the country, such as departments with indigenous communities or drought-stricken areas in the Dry Corridor. Moreover, it will finance the expansion of the program among secondary students in grades 7 through 9, with the goal of reducing the abandonment rate between primary and secondary education.

“The additional financing for the Social Protection project will allow us to keep looking after the neediest people under the framework of the Vida Mejor Strategy, while seeking to break the inter-generational poverty cycle with improved health and education for those people living in poverty,” said Zoila Patricia Cruz, Honduras’ Deputy Secretary for Social Integration.

The Bono Vida Mejor government program (previously Bono 10,000), launched in 2010, receives the financial backing of the World Bank, the Inter-American Development Bank and the Central American Bank for Economic Integration. It quickly became the country’s main social assistance program, covering thousands of poor households in rural and urban areas.

Beneficiaries of Bono Vida Mejor receive up to 10,000 lempiras (US$500) in exchange for guaranteeing their children’s attendance at school and complying with health checks for pregnant women and children less than five years of age. The World Bank has supported this project since its inception with a US$40 million credit approved in 2010 and a further one of US$12 million approved in 2013.

“With this credit the World Bank aims to help Honduras protect its most disadvantaged families with resources to cover basic consumption, and at the same time invest in its children’s future by guaranteeing attendance at school and health services. In this way we reiterate our commitment with Honduras in its fight against poverty,” said Giorgio Valentini, World Bank representative in Honduras.

The additional financing will continue to strengthen the institutional capacity of those organizations charged with implementing the program, including transparency mechanisms and targeting of beneficiaries, as well as program monitoring and transfer payment. It will also finance the development, piloting and evaluation of alternative payment systems that guarantee financial inclusion.

The US$25 million loan contemplates US$20 million to finance money transfers to Bono Vida Mejor beneficiaries and US$5 million for institutional strengthening. The loan is provided by the International Development Association (IDA) with a 25-year maturity period, including a five-year grace period.

Media Contacts
In Washington
Marcela Sanchez-Bender
Tel : (202) 473-5863
In Honduras
Angels Maso
Tel : (504) 9747-4858