Feasibility study on a capital-based income generation scheme for ...

INTRODUCTION AND BACKGROUND
damaged and destroyed” (ibid). At the same time, a number of affected fishermen did not
receive any assistance – even in over-supplied districts.
A Sustainable Recovery of Micro Enterprise Sector Program, co-ordinated by UNDP,
involves chambers of commerce and other groups in identifying and assisting affected
entrepreneurs that are not covered by existing schemes. They hold business counselling
workshops and run ‘help desks’ that assist affected SME to fill in loan applications and
develop business plans. Some have formulated cluster-based livelihood approaches,
integrating production and marketing and linking small business to big business.
1.2.4. Achievements and problems
“Considering the scale of the destruction and complexity of the issue, progress in livelihood
restoration was solid” but “The threat of some tsunami affected families moving
permanently into poverty cannot be ruled out entirely” (ibid). Prime concerns are:
• Targeting and co-ordination between agencies needs to be improved and communities
have to be integrated into decision-making (see also Appendix 9).
• Forty per cent of the affected people have still not regained a sustainable livelihood.
• While sufficient resources in terms of loans and in-kind grants for livelihood restoration
are available, there seems to be a funding gap for social safety nets.
In other words, once the government discontinues its tsunami cash transfers of Rs200 per
person per week and WFP discontinues its tsunami food rations, the only remaining safety
net for extremely poor households, who have not recovered, are the regular GoSL social
protection schemes called Samurdhi and the PAMA. Samurdhi is a social transfer scheme
that reaches 27 per cent of all households in Sri Lanka. But it has a targeting problem (only
53 per cent of the households in the poorest centile are covered by the scheme) and transfers
only about Rs110 ($1) per capita per month. This is seven per cent of the official poverty line
of Rs1,650. PAMA transfers even less (for details see Section 1.3).
1.3. Review of experience with cash and capital
transfers before, in, and after emergencies
1.3.1. Review of the international experience with cash/capital
transfers
Cash transfers in emergencies are mostly discussed and partly implemented as an alternative
to food aid. In theory, cash can be used for any need for which there is a functioning market.
In practice, cash has been used for long-term social protection as well as for emergency
responses by national governments (including the GoSL), but relatively seldom by aid
agencies.
Harvey (2005) has reviewed recent cash-based emergency responses by aid agencies and
identified 27 cases worldwide (see Appendix 4). They include CfW, cash-for-shelter, cashfor-inputs
and cash-for-basic needs in situations where droughts or other disasters have
temporarily interrupted subsistence and income generation. Some agencies have played a
particularly strong role in recent cash-based responses, notably the Swiss Agency for
Development Cooperation (SDC) and Oxfam. WFP has, until now, remained a food aid
agency, but interestingly is in the process of starting a pilot project in Sri Lanka that will, in a
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