Cash Transfers to Traders Boost Food Security and Household Incomes
In the arid and semi-arid regions of northern Kenya, hunger is a persistent challenge for the local population. Smallholder traders find it hard to secure enough food commodities to meet the community's demand, perpetuating a cycle of food scarcity and high prices. In Samburu County, Doreen Kanini, a determined food commodity trader ran a small grocery store in Maralal Town. She struggled to maintain a consistent stock of food items because of the high costs and her sales reduced to approximately KES 2,771 (USD $20) daily. She needed additional funds to revamp her business.
In 2023, Feed the Future USAID Kenya Livestock Market Systems Activity (LMS), in collaboration with the County Government of Samburu, addressed food insecurity by providing targeted cash grants to smallholder traders. The grants were designed to empower traders to increase their stock of food commodities, thus improving the county's availability and affordability of essential nutritious food items. After assessing the traders' business operations and financial needs, 298 smallholder traders received grants totaling KES 3,948,675 (USD $28,500). Doreen received KES 13,855 (USD $100) from LMS and used the money to buy a 50-kilo bag of beans at KES 10,391 (USD $75) and KES 3,463 (USD $25) to restock rice, vegetables, and cooking fat.
"I could not believe it when the M-PESA message arrived. I am incredibly grateful, and I hope that the USAID's funding sources increase so that they can reach more traders in our county," Doreen said. M-PESA mobile phone-based money transfer service.
Photo credit: USAID LMS
The cash transfer program enabled Doreen to expand her business and sales. Doreen's store, which once had empty shelves and limited options, transformed into a bustling hub of activity. The increased supply of food commodities attracted more customers, who no longer had to travel long distances or pay exorbitant prices to access essential food. This more than doubled her sales from KES 2,771 (USD $20) to KES 6,930 (USD $50) daily. Doreen puts back some money into the business and uses the rest to pay school fees for her children.
The cash transfer activity also created market linkages between smallholder traders and farmers. Recognizing the importance of supporting local producers, Doreen began sourcing her vegetables from nearby farmers. This provided farmers a reliable market and reduced reliance on external suppliers, promoting local entrepreneurship and self-sufficiency.
Overall, in the six counties – Garissa, Isiolo, Marsabit, Samburu, Turkana, and Wajir – USAID supported 2,341 traders, with cash grants of KES 23,194,710 (USD $167,350) in April and May 2023. Through the program, traders like Doreen became agents of transformation, contributing to the fight against hunger and poverty while building robust and resilient communities.
About USAID’s LMS Cash Transfer Activity for Market Traders In April and May 2023, USAID's LMS in collaboration with six county governments - Garissa, Isiolo, Marsabit, Wajir, Samburu, and Turkana disbursed KES 25,703,768 (USD $185,386) to 2,332 market traders. In June, LMS will disburse a similar tranche to the traders. The activity is aimed at stimulating market operations and ensuring that smallholder traders continue availing food commodities despite the economic challenges that resulted from drought, the COVID-19 pandemic, and the war in Ukraine.
The cash transfer ranged from KES 13,865 (USD $100) to KES 69,325 (USD $500) per trader, depending on the value of the stock, and the operational level of the trader. The traders included livestock producers, vendors of cereals, vegetables, and pulses, butchers, and milk vendors. The vendors play a critical role in the county's steady supply of food and vegetables.
The Feed the Future Kenya Livestock Market Systems activity, strengthens the resilience of people and market systems in the face of shocks and stresses and reduces the prevalence and depth of poverty, household hunger, and chronic malnutrition in northern Kenya. The activity is implemented by ACDI/VOCA.