US Firm Unveils Results of Experiment After Giving Kenyans Free Ksh2,600 Monthly for 6 Yrs
GiveDirectly, a charitable organization based in the United States has disclosed initial findings from its 12-year trial where it provided no-strings-attached funds to various groups of Kenyan individuals residing in the secluded village of Kogutu in Kisumu.
Since 2018, the charitable organization has been distributing a monthly allowance of Ksh2,600 to three different groups of Kenyans to determine whether this amount was sufficient to significantly change their circumstances.
In the first cluster, GiveDirectly gave the beneficiaries Ksh2,600 monthly for six years and allowed them to use the money according to their choice and preferences.
A portion of the people received payments for only two years, whereas some were assured income for 12 years, anticipating the conclusion of the project approximately by 2030.
However, the organization altered its approach for another group by providing recipients with complimentary funds distributed in two-year increments. The third group did not receive any assistance.
During an NPR interview, Nurith Aizenman, a journalist following the experiment from the beginning, shared that researchers found individuals retained accountability even when provided unrestricted funds and encouraged to use them at their discretion.
Nevertheless, the group that obtained funding as lump sums was inclined to explore diverse income sources through reinvestment of the money or launching new ventures.
Individuals who received monthly stipends responsibly positively transformed their lifestyles, unlike those who received no support whatsoever.
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“Compared to people who got no money, everyone who got cash was better off when it came to measures of well-being like consumption of protein and spending money on schooling. And that fits with findings from previous studies of no-strings cash aid, namely that poor people don’t waste the money,” Aizenman stated.
“But the big news here is that people who got their money in a lump sum were way more likely to start a business – a little shop, a motorbike taxi service – than people who got the same amount but parceled out over two years.”
Individuals who received monthly allowances for a span of 12 years were significantly more inclined to initiate businesses using the money as opposed to those who only obtained monthly stipends for a duration of two years.
“But the people who knew they’d keep getting those monthly installments for 10 more years – they also started lots more businesses because they found a way to turn their monthly payments into a lump sum by using these rotating savings clubs,” the journalist added.
The local clubs, commonly referred to as merry-go-rounds, permit their members to make contributions.
The Ksh3.6 billion (USD30 billion) project aims to fund not only the development of the Kenyan village but also support financially struggling remote villages in various other countries.
US Firm Unveils Results of Experiment After Giving Kenyans Free Ksh2,600 Monthly for 6 Yrs
