Charlotte Uwimana is one of many widows who has got a better life through the VUP programme and its direct financial support.
Photo: Heather Kindness, Vision 2020 Umurenge Programme

Charlotte Uwimana is one of many widows who has got a better life through the VUP programme and its direct financial support. Photo: Heather Kindness, Vision 2020 Umurenge Programme

programmes and projects

Direct support reduces extreme poverty

Published: Wednesday, February 29, 2012

Changed: Tuesday, February 18, 2014

Despite the strong economic growth that has taken place in Rwanda over the last ten years, many people still live in extreme poverty. To improve their situation, the government has launched a programme that helps the most vulnerable households by the means of direct cash support.

In the year 2000, 41 per cent of Rwanda’s population lived in extreme poverty. In spite of the country’s national poverty reduction strategy, the figures had hardly improved five years later. As a response to this trend, the Rwandese government launched the VUP-programme.

The programme started in 2008 and consists of three main components: direct support to the poorest households, state-financed public works and micro credits. Sida has supported the programme since 2010 and despite the short time since it’s been up and running, concrete results are already visible.

"Today we have 120 municipalities participating in the programme, which makes a quarter of the total number in the country. Last year around 140 000 households benefited from different kinds of supports through VUP, thus reaching 700 000 individuals," says Lars Johansson, Sida’s programme officer based in Kigali.

One person who has received help is Charlotte Uwimana. As a widow with six children and chronic stomach problems, she was classified extremely poor and was entitled to a support equivalent to 230 Swedish kronor (SEK) a month. She has spent the money on things such as clothes, a new tin roof, a goat and paraffin to start a small petty trading business. The allowance has not only improved the living conditions for Charlotte and her children, but also boosted their self-esteem. One of her daughters, who has received a school uniform through the allowance, recounted that she now “feels proud in front of others”.

The initial results from a recent household study show a virtual poverty reduction within the last two years and the extremely poor now amount to 24 per cent of the population. The results on municipal level are not yet elaborated, which makes it difficult to determine whether poverty has declined more in those municipalities that have received support, than in those that haven’t. Evident findings are however that people who have received support have actually improved their living conditions. VUP implies giving direct support to individuals, but the long-term goal is that a larger number of more self-sufficient people will contribute to an increased productivity in the country.

"Some people, like the old and disabled ones, they will be dependent on benefits for the rest of their lives. At the same time, the programme involves investments on local level, with micro credits that can add to larger yields within agriculture or to more people setting up small businesses. And the public works that are offered to the poorest, they result in new roads, school premises or terracing of the hills, which prevents land erosion and improves opportunities for cultivation," says Lars Johansson.

Half of the jobs are offered to women

Approximately half of the people participating in public works are women. One of them is 45-year-old Vivianne Nyiramahingura, who is alone responsible for a household of seven people. The eight months’ public works has enabled her to buy a goat, pay for her son’s school fees and get a health insurance for her family. As Vivianne, said: “there was nowhere to expect to get that amount of money before VUP”. She now saves money for her son’s school education and tries to get more income by selling her goat’s kids.

The VUP-system depends on the participation of the inhabitants in the municipalities that have been selected – the poorest ones in each of the country’s 30 districts. They all get to participate in a dialogue and classify themselves according to six poverty categories. The poorest ones, with most difficulties in supporting themselves, end up in category one or two, which entitles them to direct support and public works.

The structural payments allocated in accordance to the category rankings has unfortunately encouraged those who end up in category three to try to influence their local leaders to move them below the ranking line. This has led to the number of people entitled to support suddenly increasing in some villages, even though the actual poverty level hasn’t changed.

When it comes to the big challenges of VUP, Lars Johansson mentions the micro credits and the low repayment discipline.

"Only half of the loans are paid back in time, because of people not being used to borrowing money or understanding the difference between loans and allowances. We also see inexperienced administrators with difficulties to determine whether an application is solid or not. This is one of our focus areas for further improvement."

At the same time, there are several examples of how the loans, equivalent to amounts between 700 and 1000 Swedish kronor, have helped people improve their lives. Investing in new crops, selling seeds or raising animals are some of the initiatives that were granted loans, in a country where 80 per cent of the inhabitants get their income from agriculture.

One of the advantages with the VUP programme is that the different means of support only take the household’s socioeconomic status into account, not whether people are survivors from the genocide or if they belong to a vulnerable minority.

"Hopefully, this can contribute to less suspiciousness and jealousy between different ethnic groups and instead lead to reconciliation, with people jointly creating different business cooperatives," says Lars Johansson.

 

Facts VUP:

Vision 2020 Umurenge Programme (VUP) was launched by the Rwandese government in 2008 and Sida started supporting it in 2010. The support has amounted to around 30 million SEK per year for three years. An additional payment of 40 million SEK was also paid by the end of 2011.

The purpose of VUP is to contribute to the national target to reduce extreme income poverty from 36.9 per cent in 2005 to 24 per cent in 2012. The initial results from a household study, carried out in 2011, indicate that the target has been reached.
No major studies have been carried out to determine a clear-cut connection between VUP and an overall poverty reduction, but an ambitious research project that would run over several years is currently being planned.

 

The VUP programme has three main components:

  • Direct support to the poorest households that are unable to work (the old, the disabled, chronically ill, attending school or without any adults).
  •  Public works offered to the poorest households seasonally. A problem is however that approximately one third of the households carrying out public works, are actually not ranked among the poorest households in category one or two. 
  •  Microcredits are disbursed to the poorest in order to start up small businesses. People are encouraged to apply together in a joint project. (People who are ranked in the third poverty category also get a chance to apply). The first microcredits were disbursed in May 2010. One of the problems concerning microcredits is that only half of the loans are paid back in time.

Results achieved:

  • Reduced poverty in the municipalities (so-called Sectors) where VUP has been implemented. In the participating municipalities, there are many positive examples of people who have improved their life, with a better self-esteem and greater hope for the future.
  • Disbursements are being made and the money reaches the beneficiaries. Delays in payments have been a problem though. The positive results are possibly due to the government’s strong focus on results and follow-up among the country’s local leaders, as well as the relatively low level of corruption that prevails in Rwanda; a situation more similar to the countries in southern Europe than in its African neighbouring countries. 
     

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