ECONOMY

An efficient way to fight extreme poverty

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 GiveDirectly is a nonprofit organization in East Africa that helps families living in extreme poverty through unconditional cash transfers via mobile phone. Funds are transferred to people in Kenya, Uganda and Rwanda using end-to-end electronic monitoring and payment technology. 

 This is a four-step process: they first locate extremely poor communities using publicly available data. They then send field staff door-to-door to digitally collect data on poverty and enroll recipients, while focusing on households using criteria that vary by region. At the audit level, they use a set of independent checks to verify that recipients are eligible and did not pay bribes, such as physical back-checks, image verification, and data consistency checks. Following this, they transfer recipient households roughly $1,000, or around one year’s budget for a typical household, using electronic payment systems. Typically, recipients receive an SMS alert and then collect cash from a mobile money agent in their village or nearest town. Finally, at the monitor level, they call each recipient to verify receipt of funds, flag issues, and assess their own customer service. They also provide a hotline for inbound calls and in some cases staff follows up in person.

 In April 2016, GiveDirectly announced a $30M initiative to test universal basic income in order to ‘try to permanently end extreme poverty across dozens of villages and thousands of people in Kenya by guaranteeing them an ongoing income high enough to meet their basic needs’. If this works, it will pave the way for other regions. The initiative launched in November 2017 and is set to run for 12 years. In the same year, GiveDirectly applied their model for the first time in the U.S., distributing cash-loaded debit cards to residents of Rose City, TX following Hurricane Harvey.

Web site:https://givedirectly.org/

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