Risky business

This research is a study on the effect of the grants programme on the vulnerable households in Ndola. The area was selected because it is one of the urban areas on the Copperbelt province where the Ministry of Community Development, Mother and Child Health- Department of Social Welfare rolled out the grants programme under the Social Protection Funds in 2012. The grants programme has the objective of empowering households with grants in cash or material form in order to have an income source. The programme’s assumption is that income generating activities will be established once the households have been given the resource. It is expected that the income generating activities would lead to change in income and consequently asset accumulation among the households. The research seeks to generate general knowledge on the impacts of the grants programme. The main study question seeks to find out how risk and opportunity influence the effect of the grants programme for income generating activities on income and asset building among vulnerable households in Ndola. Therefore, the first specific research question seeks to find out what the effect of the grant programme for income generating activities on income and asset building is. The second specific question will establish to what extent risk and opportunity affect the choice of livelihood strategies in achieving household security. The study employed a quasi experiment to assess the impact of the programme on the livelihood of the vulnerable households. Two comparable but independent groups were created which consisted of grant recipients and non grant recipients; treatment and control groups respectively. The control group was created specifically to create a counterfactual situation. This was to give a picture of how the recipients’ situation would have been had they not received the grant. In this vein, two time frames were compared, 2012 (before) and 2014 (after). No baseline study had been done before the implementation of the programme so recall data was used for both groups for the 2012 data. The results of each group were then compared to establish whether there were any changes. Quantitative and qualitative data was collected through a survey (closed ended questionnaire) and semi structured interviews. The survey was used as a data collecting tool for respondents in the treatment and control groups. The survey questionnaire had additional questions for respondents from the treatment group that asked grant specific questions. Two types of semi structured questionnaires were administered to implementers of the programme and grant recipients who had to give their perceptions on selected issues with regard to the policy and literature respectively. Literature suggests that risk and opportunity play a role on the effect of policy programmes that aim at reducing poverty. It suggests that the two play a key role in determining the kind of entrepreneur one became as the high level of risk compels people to invest in low return businesses and not high return economically viable businesses. As a result, in order to spread the risk, the poor invest in different activities and this has an influence on their choice of strategies for achieving household security. What they choose to invest in is thus determined by the opportunity available and their level of concern for threats. The main research findings indicated that the grants programme had a positive impact on the recipients’ livelihoods. Improvement was seen in the consumption patterns; increase in social capital, human capital and to some extent financial capital through the level of savings. Access to credit was not pronounced because despite registering a positive change, its level of significance was not conclusive. The interviews revealed that two out of the five house Risky business: Opportunity through the eyes of risk iv owners had improved their dwellings .There was no improvement in the acquisition or possession of household items and business inputs. A comparison of the two grant forms revealed that cash recipients performed better than the material grant recipients in a sample of indicators selected. It was evident that risk and opportunity influenced the choice of business and consequently, the choice of strategies adopted for household security. The ever present notion of risk compelled the respondents to invest in assets such as social capital through lending and acquiring membership to groups and by investing in human capital through education and access to medical services. The strategies aim at cushioning the impact of future threats (ex-ante risk management) as they are a form of insurance in some cases. The greater part of the income went towards improving consumption patterns. The study gave new insight into the grants programme. It showed how risk and opportunity influence the effect of the grants programme and it gave suggestions on how to improve on the programme. It showed why the grant form should be left to the would be recipients to decide and why the withdrawal of assistance should only be done until the income generating activity has shown sustainability.