Interview with Mariana Escobar, deputy director, Department for Social Prosperity, Colombia
This government agency is charged with overcoming extreme poverty for some 4 million people and making reparations to almost 7 million victims of the country’s internal conflict—and there is a great intersection of these two populations.
Fifteen years ago, Colombia created a strong conditional cash-transfer (CCT) program, “Más Familias en Acción” (MFA, More Families in Action). It is well designed and its conditions can be properly followed. When the Department for Social Prosperity was created and took over the MFA program, we adopted CCT as the tool for creating social inclusion. We already have 3 million families in the program, and the evaluations have proven that it has worked pretty well in terms of better health and nutrition, retention rates among school-aged children, and financial inclusion. Ninety percent of families who receive MFA payments now use a formal financial product.
In the short term, CCTs supplement an unreliable income in the poorest families, but it also helps in the long run. If you focus on assessing or thoroughly following up on those conditions—if children are well-fed and if they go to school—you can help build long-term social capital. It is great as a way of overcoming poverty, and it has a very valuable, trans-generational effect.
In Colombia, we have made strides toward making education and access to the health system universal. Therefore, in larger cities like Bogotá, we perhaps have to think about discontinuing the program; whereas, in rural areas, the program had not been working because it is difficult and expensive to reach dispersed communities. For this reason, we decided to gear our efforts towards those rural areas.
Our strategy is to build productive capacities and help beneficiaries accumulate productive assets because the money alone is not enough. We are doing this through financial inclusion, financial education, and microinsurance products, and we coordinate the CCTs with livelihood programs. The first step in financial inclusion has been to open bank accounts to receive the transfers. However, in some very distant rural areas and indigenous communities, we have had to rely on a network of banking agents. And some indigenous communities (which are generally not willing to accept the banking system) have recently come to accept women opening savings accounts.
In our financial education programs, we are mainly targeting savings. While we have women’s savings groups and individual savings processes set up, it is going to take a while to reach scale because of the vast numbers. We plan to educate 2.5 million people receiving their transfers through formal financial products, and we are using very interesting tools. We have tablets loaded with an easy-to-use, intuitive financial-literacy app that we developed with Fundación Capital. It covers topics like how to use an ATM, how microcredit and savings works, how to save when you buy food, and how to buy better food.
To complement the CCTs, we coordinate livelihood programs to build capacity in the areas of food security, housing, water, and income generation. The Department had other programs that were dispersed and poorly disseminated, so over the last two years, we have integrated CCTs with the livelihoods programs. What we have seen is that integration speeds up and improves the quality of interventions; indeed, it has to have everything in order to work.
We measure the success of our work by tracking 15 critical variables on the Multidimensional Poverty Index (MPI). We use it not only to measure income but also as a public policy tool. We have a scheme called La Red UNIDOS (Unified Network), in which government staff coach 1.5 million of the poorest families. Our social coaches work one-on-one with families to overcome the most critical variables in the MPI. In two years, nearly 250,000 families have risen from extreme poverty.
You have to listen to communities because they know what the problems are. They do not have access to opportunities or information, so we help them close the gap. When people participate, they become citizens, and that’s when you build a completely different relationship with them.
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Table of Contents
- Executive Summary
- Where’s the Map?
- Global Data Show Diverging Paths
- Integrated Health and Microfinance
- Saving Groups
- Graduation Programs
- Agricultural Value Chains
- Conditional Cash-Transfer Programs
- Digital Finance
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