Egypt, World Bank sign $400m loan to support poor families

Egypt and the World Bank have signed a loan worth dlrs 400 million to combat poverty and support the poor Egyptian families under a program named "Takaful and Karama".

In statements here after the signing ceremony, Egyptian Minister of Social Solidarity Ghada Wali said the program will address poor Egyptian families, especially in Upper Egypt.

The new World Bank project will support the government of Egypt’s plan to provide income support and expand social inclusion to almost 1.5 million poor Egyptian families with young children, elderly, and persons with severe disabilities, the minister added.

The US$400 million project approved by the World Bank’s Board of Directors will support the Government’s established Takaful and Karama national targeted social safety net program, develop transparent and efficient targeting and delivery systems, and support the Unified National Registry.

The Strengthening Social Safety Net Project will support the Ministry of Social Solidarity’s implementation of a system that properly identifies the poor, that its resources reach the poorest segments, and that the business process of the social safety net system becomes more efficient, more responsive, and accountable to clients.

“This project will support the Egyptian government's design and implementation of a new cash transfer program and improve the targeting of the social safety net system which is a critical element to accompany any reforms,” said Hafez Ghanem, World Bank Regional Vice President for the Middle East and North Africa.

“The World Bank appreciates the Egyptian Government’s emphasis on strengthening social safety nets in Egypt and is mobilizing its global expertise to ensure that the most vulnerable families are identified and able to benefit from the program.”

Despite good progress in Egypt’s human development indicators over the past two decades, education and health still need further attention, especially in the poor regions. Around 21% of Egyptian children ages 0-4 years are stunted. Inadequate feeding and childcare practices among young mothers are believed to be associated with malnutrition. On the education front, while there is nearly full enrollment for children in the richest quintiles, the poorest quintile still registers enrollment rates of about 73% in basic education and below 50% in secondary levels.

Under the Takaful program, poor households will receive monthly income support based on an incentive-system related to school attendance and utilizing maternal and child health care services. Karama is an unconditional income support that aims at protecting and reaching out to poor elderly people above 65 years and those with severe disabilities.

“This project is all about social inclusion and expanding opportunities to underprivileged children especially in Upper Egypt. It will ensure that children of poor families will have consistent access to health and education opportunities through the conditional cash transfers,” said Afrah Alawi Al-Ahmadi, World Bank Senior Social Protection Specialist and Project Team Leader.

The World Bank is working with the government on the development of a Unified National Registry in order to address the poor targeting and fragmentation in the existing safety net and service delivery programs. This national registry has already made some progress towards linking the Family Smart Card, Social Solidarity Pension, and social security databases through the national ID.

The current portfolio of the World Bank Group in Egypt includes 26 projects for a total commitment of US$5.4 billion in FY15, including 17 IBRD lending operations ($5.27 billion) and 9 major Trust Funds ($139.6 million). The World Bank finances projects for faster delivery of benefits to the people of Egypt in key sectors including energy, transport, water and sanitation, agriculture and irrigation, social protection, as well as health and education.