US charity to give 6,000 Kenyans cash for 10 years, 'no strings attached'

A woman fries fish along a street in the sprawling Kibera slums in Kenya's capital Nairobi April 23, 2010. Photo/REUTERS
A woman fries fish along a street in the sprawling Kibera slums in Kenya's capital Nairobi April 23, 2010. Photo/REUTERS

What would happen if poor villages were given cash for the next decade, no strings attached?

That's the question one US

charity wants to answer through a pilot programme to provide poor Kenyans with a guaranteed basic income for 10 years.

In an ambitious social experiment, GiveDirectly plans to transfer cash to 6,000 Kenyans living in extreme poverty for a decade, making it the world's first basic income trial of its kind, it said.

With UN agencies, governments and private sector companies due to discuss ways of delivering aid more efficiently at the World Humanitarian Summit this month, GiveDirectly co-founder Michael Faye said cash transfers had huge benefits.

"Cash transfers are one of the most effective methods of development intervention," Faye told the Thomson Reuters Foundation.

"You don't need to do anything to receive them. You simply get it and can spend it on whatever you like."

Cash transfers account for only about 6 per cent of humanitarian aid, yet studies show school attendance and access to healthcare significantly improve when people receive cash.

Recipients also tend to save or invest the money, which promotes income generation instead of reliance on food aid.

"Whether it's trying to assist them out of poverty, or in times of crisis and disaster, we need more tools on the table and cash transfers can be particularly effective at enabling flexibility and choice," said Sarah Bailey, a researcher at the Overseas Development Institute (ODI) thinktank.

GiveDirectly has yet to choose the recipients and the exact location for the trial, which is due to start at the end of the year and estimated to cost $30 million to run - with much of the funding coming from private investors and public donations.

Though details are still being finalised, each person will receive about $0.70 to $1.10 per day through mobile money transfer services such as M-Pesa. The target recipients live on about $0.65 a day, Faye said.

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