By IMMANUEL CHITWA –
A financial empowerment programme prevented 14,500 families in Zambia and two other countries from falling into extreme poverty after climate shocks of last year.
This is according to a report released on Monday by Department for International Development (DFID), World Vision UK and VisionFund International.
The report reveals that an innovative market-based approach is central in building resilience to the El Nino climate shock that impacted East Africa throughout 2016 and early 2017.
Under the project dubbed, Innovative Recovery Lending programme, about $3.3 million was disbursed by the World Vision in form of loans to Zambia, Malawi and Kenya.
This was to assist rebuild existing businesses affected by disaster or establish new businesses by taking advantage of emerging opportunities.
The Recovery Lending project which was launched in February 2016 after growing evidence predicted strong weather patterns would have a devastating effect for the 2015/16 agricultural seasons in East and Southern Africa.
“The project supported 14,500 families, with 72 per cent of borrowers women, in rural areas of Kenya, Malawi and Zambia dealing with the severe effects of droughts and floods caused by last year’s very strong El Nino,” the report says.
The funds helped clients to avoid extreme poverty by quickly re-establishing their farming businesses and diversifying income to help bridge the gap between planting seasons.
Through the loans clients diversify into short-season productive activities such as hot-culture, Small livestock, retail and service businesses expanding clients portfolios.
Additionally, the report said an average of £100 to the project prevented thousands of families from falling into extreme poverty because of droughts and floods.
Furthermore studies had shown that the supply of microfinance reduces sharply after disasters which negatively impacted the livelihood, food productions and the economic health of rural communities.
Vision Fund global insurance director Stewart McCulloch said the loans impacted about 87,000 beneficiaries.
He said the funds could be utilised in new projects changing even more lives in vulnerable communities around the world.
“Recovery Lending has the potential to be self-sustaining, complementary to other disaster recovery interventions, and scalable to other countries,” Mr McCulloch said.