Financial Inclusion and CSA Adoption - Enhancing the Resilience of Smallholder Farmers to Climate Change in Zambia

Financial inclusion is essential to empower smallholder farmers in Zambia, particularly women, enabling them to adopt climate-smart agriculture (CSA) practices and build resilience against climate variability. However, access to financial services, such as credit, savings and insurance is limited, impeding farmers’ ability to invest in CSA practices that require significant upfront costs and risk management. This paper explores the challenges and opportunities in promoting financial inclusion for smallholder farmers in Zambia, emphasising the importance of tailored financial tools to address the unique needs of rural communities, especially the most vulnerable groups.

Written by Arthur Moonga, Andrew Shepherd and Lucia da Corta

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Evidence From Cash Plus Programmes: Lessons for Zambia

Social protection strategies, and cash transfer programmes in particular, have been on the rise globally since the early 2000s. By 2019, 35 African countries had adopted a national social protection policy or strategy. Cash plus approaches (including graduation programmes) addressing a wider range of socioeconomic outcomes emerged more recently and have expanded quickly. The Zambian government approved a cash plus approach in 2022, and a range of cash plus interventions are already being implemented. Exploring cash plus experiences and evidence from other countries is key to informing programme development, with a focus on what we can learn from these contexts that is relevant for Zambia. This includes ‘what works’ in terms of different combinations of cash plus components as well as how to deliver through national and local governance structures.

Written by Roz Price, Kate Pruce and Rachel Sabates-Wheeler

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The Politics of Cash Plus in Zambia

Social protection is now well-established on the policy agenda in Zambia, including various cash plus initiatives and social protection responses to shocks, such as the recent drought. This paper considers lessons from the success story of expanding social cash transfers in Zambia and applies these to the country’s current social protection context. Using a 3I(R) approach to political economy analysis, which focuses on institutions, interests, ideas and resources, the paper proposes a series of conclusions and recommendations drawn from this analysis. These include the value of consistency and persistence in promoting a policy idea, ideally through a strong policy coalition; the importance of connecting policy and political constituencies; the role of political motivation and suggestions for alignment with government ideas and priorities. There is currently political momentum for cash plus, as well as a growing evidence base both globally and within Zambia, which now needs to be translated into financial commitment. Establishing a more comprehensive suite of social protection programmes for households with and without labour capacity can contribute to upward mobility out of poverty and building resilience to future shocks in Zambia.

Written by Kate Pruce

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Financial Pathways toward Greater Resilience and Economic Inclusion

Facilitating access to financial services is a core component of most economic inclusion programs, which aim to build resilience and create opportunities for poor and vulnerable households. These programs offer a comprehensive package of interventions, such as cash transfers, coaching, and business capital, to address the constraints preventing poor and vulnerable people from effectively coping with and recovering from shocks and accessing job opportunities.

Understanding the barriers to financial inclusion and the specific needs of poor and vulnerable people is essential for tailoring products that create value for them and effectively contribute to their resilience. Core components of economic inclusion programs can be adapted to provide better pathways for greater resilience. This paper offers insights into how financial services facilitated in economic inclusion programs can better contribute to resilience building.

First, it discusses how financial services can be designed to meet the needs of different participants and how synergies can be fostered between the financial inclusion components and other components to achieve greater financial inclusion and resilience.

Second, the paper delves into how collaboration with financial service providers or market facilitators and leveraging digital technology can help achieve financial inclusion and resilience-building outcomes. Third, the paper offers recommendations for economic inclusion practitioners seeking to strengthen the financial inclusion components of their programs and financial inclusion practitioners aiming to complement their interventions to enhance the resilience of the most vulnerable microfinance clients.

Written by Serena Stepanovic, Inés Arévalo-Sánchez, Vidya Diwakar, and Dan Gilligan

Financial inclusion and chronic poverty: access to savings and insurance services in Tanzania

This brief examines the current extent of financial inclusion in Tanzania – focusing particularly on the chronically poor – and also specifically on access to savings and insurance services. This is because of the increasing body of evidence about the role which the two services can play in helping households to escape poverty and, by implication, to manage shocks and build their resilience.

Authors: Lucy Scott and William Smith

Photo Credit: Panos Pictures

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