Impact of Social Safety Net Programs In Seasonal Deprivation

Around the globe, there are varying types of social safety net instruments used by the governments, NGOs, microfinance institutions and private entities. The extent of hardship and welfare of the vulnerable and poor households largely depends on the effectiveness and adequate coverage of these safety net measures. Researchers have found in large number of instances that these instruments are quite useful and have substantial welfare and anti poverty impact on the recipient households. monga is a recurrent case of seasonal deprivation that forces a large number of households in the northern region namely – Greater Rangpur, suffer from occasional starvation, consumption rationing and induces poor households to sell advance labor, crops and assets. The Bangladesh government has been operating a number of social safety net programs – cash or in kind - in this part to reduce the vulnerability of households during monga pledging a long term solution. The study examines the impact of the social safety net programs on the welfare of the poor households during seasonal deprivation –called monga, in the five districts of Greater Rangpur namely Lalmonirhat. Nilphamari, Kurigram, Gaibandha and Rangpur. The study finds that VGD/VGF has strong positive effect in reducing poverty while old age pension has no such contribution. The findings also suggest that highly vulnerable groups such as day laborers, beggars are left out from the benefit of social safety net programs due to their limited coverage and size.Social Safety Net Program, Seasonal deprivation, Vulnerability, Poverty

Does microfinance move the households toward self employment?

The present study is based on 5208 observations, which is comprised of participant households of microcredit programs, non-participant households of program villages as well as non-participant households from control villages. We found that among the participant households 37% depend on wage as well as self employment activity and 20% is solely dependent on self-employment activity and the remaining depends on dual activity (self-employment as well as wage employment), but among the non-participant households 60% is solely dependent on day labor activity. To find the link between occupation selection and microfinance participation, we use simple as well as multiple regression models like logit, multinomial logit, seemingly unrelated regression, etc. The regression results based on earnings from the elective occupations or number of days worked in that occupation suggests that the surveyed participant households have higher likelihood of being self-employed or to maintain self-employment as well as wage employment at a time to increase their welfare. The shifters due to relaxation of credit constraint or proliferation of access to credit moves toward sole self-employment activity with higher likelihood than the dual activity – to be employed in self-employment as well as wage employment within a given time span. In compendium, we can lucidly claim from this paper that beyond the asset structure of the households such as landholdings, savings, education, etc., the microfinance directly induces self-employment activity or transfer available working days from the day labor activity to self-employment activity and maximize their economic gain such as higher income, savings etc.Credit, Self-employment, Logit, Multinomial logit, Seemingly Unrelated Model

Diversion of loan use: who diverts and why?

This paper uses 2973 loan profile records of 2810 poor households who have taken these loans from different quasi-formal sources of which about 50 percent of the loan taken is supplied by the Ultra-poor oriented program designed by PKSF. The objective of this program was to create some income source for these Ultra-poor through credit support. But diversion of loan use from the proposed IGA to other non-productive sector, especially to consumption hinders the objects and at the same time causes a threat to the MFIs as some of them become default. We observe that among these Ultra-poor households who have taken loan, about 68 percent of the loan was diverted from the proposed IGA to other activity with different degree of diversion and of these diverted loan, 40 percent was fully diverted. We find that among the non-savers, wage employers, inhabitants of char have higher likelihood of diverting their received loan from the proposed IGA to others and more than 28 percent of each loan on average was used for consumption.Credit, Diversion, Default, Fund, IGA, Index, Loan, Microfinance

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Can social safety nets alleviate seasonal deprivation ? evidence from northwest Bangladesh

This paper examines the role of social safety-net programs in Bangladesh run by the government and nongovernmental organizations to mitigate seasonal deprivation in the country's highly vulnerable northwest region. Specifically, the paper explores whether social safety nets are limited to averting seasonal deprivation or can also address seasonality of income and employment more generally. Using a recent survey from the greater Rangpur (northwest) region, the paper finds that social safety nets have a positive effect on mitigating both seasonal and non-seasonal food deprivation. The results are robust, owing to the recent expanded coverage of social safety-net programs run by nongovernmental organizations active in the region. But given the annual recurrence of monga (seasonal food insecurity) in the northwest region owing to agricultural seasonality and an overwhelming dependence on agriculture for livelihoods, social safety nets are not a reliable tool for monga eradication. Programs are also needed to promote the income and productivity of the poor through diversification of income and employment.Safety Nets and Transfers,Rural Poverty Reduction,Food&Beverage Industry,Regional Economic Development,Housing&Human Habitats