Short Abstract:

The paper assesses the short- and long-term effects of a graduation programme in Malawi on (income and multidimensional) poverty and climate resilience. It uses a mixed methods approach: survey and qualitative data were collected in two different years. Therefore, the paper contributes to generating evidence on the capacity of graduation programs to ensure a sustainable exit from poverty.

Long Abstract:

To tackle poverty and vulnerability over the last decades the government of Malawi has implemented a number of noteworthy social protection and broader anti-poverty programmes. The most known and probably successful is the Social Cash Transfer Programme (SCTP). While impact assessments indicate that this programme has improved its beneficiaries’ access to basic goods and services, they also show that it does not ensure their sustainable graduation out of poverty. To address this weakness, the Government of Malawi together with IFAD launched the Financial Access for Rural Markets, Smallholders and Enterprise Programme (FARMSE) and in particular one of its components, the Ultra-Poor Graduation (UPG) intervention. Inspired by graduation programmes, such as BRACS model in Bangladesh and similar interventions elsewhere, the UPG targets the SCTP beneficiaries and provides them with seeds capital and different types of training and coaching. The general objective is to ensure a sustainable exit from poverty of its beneficiaries, by alleviating capital and knowledge/skills constraints. The UPG of FARMSE was implemented by five different NGOs in six districts of Malawi, covering 20,800 beneficiaries, all SCTP recipients.

While over the last years, scholars have produced new evidence on the effectiveness of graduation or social protection plus interventions, very few have looked at these effects after the end of the project. Another important evidence gap consists in understanding whether a limited set of interventions – compared to the original BRAC model that encompasses 4-5 different components – could be as effective as the comprehensive one. This would permit to save resources in resource-constrained areas. This study intends to contribute to filling this gap, by analyzing the short- and long-term effects of the UPG in Malawi on income and multidimensional poverty, as well as on households’ resilience to climate shocks.

This study relies on primary data collected in two different years, 2021 and 2023 as well as pre-intervention data obtained from the SCTP targeting registry. In each of the six districts, the two surveys covered a sample of programme beneficiaries as well as a control group, i.e. a sample of household living in the same district, with similar characteristics (including being SCTP beneficiaries) of the beneficiaries. The survey included several modules on, among other things, food security, expenditures, education, and resilience to shocks. While this paper mostly relies on these quantitative data, we also collected qualitative data which were especially useful in understanding the specific selection criteria used by the NGOs and the mechanisms that explain the results of the quantitative analysis. The qualitative analysis is also important given the limited sample size used in the quantitative analysis, especially for the 2023 survey due to difficulties in tracking households back after two years.

To assess programme effects, we will use a difference-in-difference econometric strategy. We will also use different measures to identify who are the real beneficiaries and, therefore, conduct different robustness analyses. The main dependent variables are: income poverty, graduation based on a multiple set of indicators identified by IFAD, multidimensional poverty, and indicators of resilience to climate-related shocks. The latter will primarily focus on drought, flood, and cyclone, events that have often occurred in different parts of Malawi in the last years. Moreover, the analysis will also look at intermediate outputs such as participation in the Village and Saving Loans groups, investment in productive activities, livelihood diversification.