Benazir Income Support Programme: WB approves loan to tighten social safety net

ISLAMABAD:

Since four out of every 10 eligible families are deprived of monthly cash grants due to resource constraints and procedural formalities, the World Bank has approved an additional loan of $150 million for expanding the social safety net coverage.

The loan was approved following the Washington-based lending agency’s decision to upgrade the Benazir Income Support Programme’s (BISP) status to ‘satisfactory’. The additional funds would expand the programme’s coverage from the existing 3.6 million to at least 5.5 million households.

The programme was earlier downgraded to ‘moderately satisfactory.’

As many as 5.9 million families have qualified for the monthly cash grant, based on a poverty scorecard survey, but the BISP has been providing the grant to 3.6 million families, primarily due to resource constraints and incomplete data from grant beneficiaries.

Many families qualified for the programme but did not have national identity cards for instance, a BISP official said.

According to a recent monitoring report of the finance ministry, as many as 1.1 million households were removed from the list of BISP beneficiaries due to changes in the cash transfer criteria. Meanwhile, another 700,000 beneficiaries, who had qualified but were lagging on procedural formalities, were added to the net, said a BISP official.

Integrated system

The project will assist the government in evolving BISP from basic cash transfers to a more integrated national safety net system, said an official handout of the World Bank.

“The government of Pakistan is committed to establish an effective social safety net platform for a well coordinated, effective, and efficient support to the poor families,” said World Bank Country Director for Pakistan Rachid Benmessaoud.

“The project will build on the achievements of BISP in establishing objective targeting system and use of modern technology and third party evaluations for program administration,” he added.

An official of the lending agency said the disbursements would be results based.

In the initial phase, the BISP would be required to disburse the Rs1,000 monthly cash grant to 4.3 million families.

Expanding the scope

The loan would help finance the increase in coverage of basic cash grants, introducing co-responsibility cash transfers linked to primary education of beneficiaries’ children and strengthening operations and management systems within the BISP, said the World Bank.

“The introduction of co-responsibility cash transfers under the Waseela-e-Taleem programme will help beneficiary families enroll and ensure school attendance of their children aged between five and 12,” said Iftikhar Malik, co-team leader of the project.

Modalities

The $150 million loan was approved under the Social Safety Net Project, which has a total estimated cost of $2.25 billion. The bank had sanctioned $60 million in technical assistance for the project in May 2009, 61% of which has been disbursed so far.

Of the total cost, $2 billion is being arranged for by the government and $105 million would be provided by the Department for International Development of the United Kingdom.

Islamabad would pay 2% interest on the amount and return it in 25 years.

Published in The Express Tribune, March 8^th, 2012.