Empower women through unconditional cash transfers

This year’s International Women’s Day 2024 theme is “Invest in Women: Accelerate Progress”. The subject is particularly relevant for Uganda, where women make up more than half of the population, 46 percent of whom constitute Uganda’s labour force but for whom the median monthly wage is Shs130,000 less than that of men. 

Women are primarily engaged in the informal sectors where their earnings, job quality, and security lag behind that of their male counterparts. 

There is growing evidence from research that backs the use of cash transfers as a tool to alleviate poverty and increase women’s economic empowerment. Cash transfers are cash disbursements made without rules or conditions for use.

Well-thought-out cash transfer programmes are crucial because they enable beneficiaries to meet basic needs, access essential services such as healthcare, or invest in income-generating activities.  

Studies have drawn a path between the increased ability to meet crucial needs and increased self-confidence, self-efficacy, and financial autonomy in women, leading to empowerment. 

In 2023, the Financial Sector Deepening Uganda, in partnership with TradeMark Africa and 100WEEKS, participated in an initiative to provide informal cross-border women traders at the Elegu border town with unconditional cash transfers alongside training in business and entrepreneurship.

The project aimed at offering relief to women cross-border traders whose trade suffered due to the closure of borders and nationwide lockdowns at the height of the Covid-19 pandemic and lost their businesses and incomes.

Relief in form of a cash transfer was disbursed to just over 500 women in three instalments. Each woman received a total of Shs594,264 (153). The women also could voluntarily attend any of the three financial literacy trainings provided. 

While short-term, the project resulted in some positive gains. The cash transfers enabled the women to access basic needs, including food, school fees, and medical services. 

Women already engaged in entrepreneurship were more likely to use the cash to diversify their economic activities or expand their businesses. Interestingly, on average, 40 percent of the women attended the three trainings despite its non-mandatory nature. The cash likely increased their access to basic needs, reducing survival stress and opening them up to capacity-building opportunities. 

A key challenge was that over 80 percent of the women did not have a national ID card or a mobile money account in their names. They had to recruit a sponsor to receive the money on their behalf. A national identity document is increasingly necessary to access government and financial services. 

To close the gender gap and increase women’s economic empowerment, targeted interventions are still needed to ensure that every Ugandan, including those outside urban areas, has access to a national identity card.  

Unconditional cash transfers are a valuable tool to improve women’s livelihoods, productivity, and empowerment. The transfers enhance access to basic needs, reduce their survival stress, opens them up to learning opportunities, and enables them to save and invest. 

A small investment can mean the difference between earning enough to consume and enough to save, and invest.

Policymakers and development practitioners should consider cash transfers as one of the tools they can deploy to alleviate poverty and advance women’s economic empowerment, even as they consider cultural and social contexts for implementation.  

Ms Diana Akullu Wanyama is the Intervention Manager, Market Infrastructure at the Financial Sector Deepening Uganda.