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Kalpana, a 48-year-old single mother, faced the darkest night of her life in October, when a tragic accident claimed her husband’s life, leaving her alone with four daughters.
“October brings festivals to others, but it was the worst month in our life,” said Kalpana as she recalled her past. A 48-year-old single mother at Panchapuri Municipality in Karnali Province of Nepal, Kalpana faced toughest economic challenges, which at times were unbearable to her and her children.
However, a glimmer of hope emerged from an unexpected source — university students conducting an assessment. This encounter marked the turning point. Kalpana’s life transformed in December 2022 when a mobile alert announced the deposit of NPR 13,600 into her bank account. With no strings attached, this was the inception of Temporary Basic Income. Kalpana’s home, once clouded by sorrow, now resonates with festivity, as her daughters resume their education without hindrance. In her free time, she focused on rearing livestock and earning money from wage labour.
“I paid NPR 7,000 each for my two daughters’ education and secured admission fees in Bachelor’s in Commerce in Janata Multiple campus at Bidhyapur in Surkhet district”. Another installment of NPR 13,600 credited in my account again in July 2023, that I have saved in my bank account to invest in my daughter’s education. I can eat less but cannot compromise my daughter’s education,” said Kalpana.
Temporary Basic Income as a solution
Kalpana is one of the 3,500 economically poor and vulnerable women who received cash as a temporary basic income, through the UNDP project Sambodhan during the toughest times in their lives. The project provided strong evidence to show the solution is effective in Nepal’s context where a significant chunk of population is in dire need of support.
According to indication of ILO’s COVID-19 Labor Market Impact in Nepal, nearly 3.7 million workers earning their livelihoods in the sectors deemed most at risk to experience a significant (medium to high) reduction in economic output as a result of the Covid-19. Approximately 80.8% of workers in Nepal have informal jobs and they lack basic benefits provided by formal jobs including social protection coverage. Among them women, who are mostly engaged in unpaid work, are not qualified for social protection systems as they lack required legal documents.
Local government leaders, who were engaged as part of the pilot project, have seen the impact of cash support to the neediest population in their constituencies. Mr. Tulsi Ram Regmi, Mayor of Putalibazaar Municipality, one of the local governments partners in the project said, “I was very glad to see that the most vulnerable women had been able to secure their essential items like food, medicines etc. from the basic income they received during the difficult times.”
When Mr. Regmi witnessed the direct impact of the programme, he provided additional support to the needy population to help them expand their small enterprises which they had started with the cash. “I visited many of their farms and they are earning as well. The cash to vulnerable people is very good option provided they are linked to sustainable income generation,” said Mr. Regmi. The municipality also provided the women with free health insurance.
Why Temporary Basic income?
In response to the COVID-19 crisis-induced lockdown, the inadequacy of existing several social assistance and relief packages in Nepal became evident, particularly in addressing vulnerabilities among marginalized groups. Vulnerable communities like single women, the disabled, and daily wage workers faced heightened risks of impoverishment. The concept of Temporary Basic Income (TBI) emerged as a proactive solution to provide immediate protection and bridge economic disparities across gender dimensions.
Recognizing the urgent need for unprecedented measures, UNDP proposed the concept of Temporary Basic Income as a tool to prevent further poverty and empower individuals. TBI offers cash support to vulnerable populations, ensuring economic autonomy and reducing gender-based discrimination. In Nepal, the “Sambodhan” project was initiated in 2021 to provide emergency cash assistance and link beneficiaries to sustainable livelihoods.
Sambodhan operates on three pivotal principles: conflict sensitivity, gender inclusivity, and “Leave No One Behind.” Collaborations with local governments, universities, financial institutions and NGOs facilitate beneficiary identification, provide financial literacy and sustainable income generation. The project aims to strengthen local governance, transition vulnerable individuals toward prosperity, integrate social protection, and provide financial literacy.
What have we achieved?
The project has so far provided basic income to more than 3,400 most vulnerable women, who were from the marginalized and excluded communities and around 2,500 are under way to receive basic income this year. An independent assessment conducted by Pokhara University showed that basic income received by women were very purposefully and calculatedly spent. Many invested to ensure the longer-term income generation. More than 60% of the recipients said they used the basic income to enhance their livelihood prospects, 20% have utilized it to cover health treatment, and 10% have invested the income to send their children to school/college. In terms of livelihoods, most of them have invested the cash in buying livestock, such as goats, pigs and cows.
The project has closely worked with local governments to bring these vulnerable women and their family in access to social protection like health insurance. All beneficiaries in Gandaki Province have been enrolled into health insurance with local governments paying yearly insurance premiums for the women. The medical insurance covers expenses up to NPR 100,000. The Karnali Province Government is also following the suit. Notably, even the private companies have started to cover the premiums of the vulnerable groups in their communities as part of the practice.
As an extended impact, the local governments participating in the TBI project have benefitted from the modern data system, which provides an updated profiles of vulnerable population within their constituencies. Developed by UNDP in partnership Pokhara University and Mid-West University, the Socio-Economic Vulnerability Information Management System (SEVIMS), is an info system aiding local governments to locate vulnerable individuals, households, and communities. It scores households using standard indicators, tracking progress and guiding interventions accordingly. The SEVIMS, including the vulnerable population list, has been handed over to most of municipalities.
“Further the purpose of TBI is more than meeting daily needs and focus on narrowing down the gap between men and women and provide flexibility, courage, confidence for women to cope crisis and come equal foot to society, thus reducing further discrimination,” says Ms. Binda Magar, Governance Advisor and Assistant Resident Representative of UNDP Nepal.
The project’s objectives encompass four key areas. Firstly, it focuses on bolstering local governance systems and knowledge for addressing socio-economic vulnerabilities among marginalized women through Temporary Basic Income. Secondly, it facilitates the linkage of vulnerable women with sustainable livelihoods and income-generating prospects, aiding their transition from vulnerability to prosperity. Thirdly, it strives to integrate social protection services at the community level, extending access to essential schemes like health insurance for vulnerable individuals. Lastly, the project empowers vulnerable women through financial literacy, equipping them to effectively manage income, make the most of savings and investments, practice prudent spending, and engage with banking services.
The SEVIMS has helped us identify the vulnerable people living in remote and even in urban areas along with their exposure to various disasters and resilience capacity to cope these disasters. It has also helped us prioritize our support to the people by informing us on some essential needs like water supplies, disability, gender specific support, housing, essential support, sanitation, health care etc.” – Mr. Surat KC, Mayor of Beni Municipality
Leveraging partnerships that drive change
The success of the project can be attributed to its smart utilization of strategic partnerships with universities and banks, which helped make the intervention more targeted, scientific, data-driven, and foolproof. By leveraging the expertise of academic institutions and the reach of financial institutions, the project laid a solid foundation for the local government to build on their social safety interventions for years to come.
The project signed MoU with Pokhara and Mid-West University to conduct scientific assessment based on socio-economic and vulnerability index of populations in rural areas with agreed indicators. Based on the detailed assessment, the beneficiaries were long-listed and ranked with cumulative index numbers gained against their vulnerability. Based on ranking, project choose the beneficiaries with highest range of score. Those who are chosen beneficiaries are provided with basic income in an installment basis.
Assistant Professor Lalit Jung Shai from Mid-West University’s Department of Conflict and Peace Studies said that the partnership was also beneficial to the university as it provided an opportunity for its students to engage in a practical assessment, providing them exposure to real-life practicalities that complement their classroom learning.
“Our partnership with UNDP has established a standard practice and tool by generating socio economic vulnerability standards that generates scientific facts and data on socio economic vulnerability to rationalize the intervention based on the needs of people and even to government.” — Dr. Sudip Thakuri, Dean of Graduate School of Science and Technology of Mid-West University in Karnali Province.
“The socio-economic vulnerability standards have been proven very neutral, scientific, inclusive and evidence based, that has been very helpful and demanding by local governments as well, as they have faced challenges in identifying vulnerable people.” — Dr. Namraj Dhami, Executive Director of Pokhara University Research Center.
In the same vein, the project’s partnership with Government-owned bank, Rastriya Banijya Bank helped provide financial literacy to the project beneficiaries, while also bringing them into the banking system.
According to Financial Access Report 2021, around only 35% of women have bank account in Nepal. Since most of the vulnerable women did not have legal certificates, the partnership with bank allowed them to opt for “Sambridddhi Bachat Khata” that enabled opening of bank accounts in recommendation of local government.
“Over 5,000 previously unbanked individuals now have access to the banking services, which aligns with the Prime Minister’s agenda to providing everyone with access to bank. It helped the government reach disabled, pregnant, elderly, and needy individuals with services at their doorstep. Financial literacy sessions empowered beneficiaries to wisely manage cash, savings, expenses, and banking services.” — Mr. Lujah Shrestha, Deputy Manager, Rastriya Banijya Bank, Kathmandu Headquarters.
