Using Disaster Risk Financing to Build Adaptive Social Protection for Climate Shocks in Malawi

Using Disaster Risk Financing to Build Adaptive Social Protection in Malawi has been prepared by the Finance, Competitiveness & Innovation Global Practice’s Crisis, and Disaster Risk Finance team in collaboration with colleagues from the Social Protection and Jobs Global Practice. Funding and expertise to support the Government of Malawi (GoM) in the design, implementation, and financing of the mechanism was provided by the Disaster Protection Program (funded by the UK) and from the Global Shield Financing Facility (formally the Global Risk Financing Facility, funded by the UK and Germany).

The GoM has put in place a mechanism that enables its flagship safety net —the Social Cash Transfer Program (SCTP)—to scale up response to additional participants when shocks occur. Making the SCTP shock-responsive is a key strategic pillar of the government’s Disaster Risk Financing Strategy. The SCTP scalable mechanism was first implemented during the 2021/22 rainfall season in three initially selected districts (Blantyre, Ntcheu, and Thyolo). It covered 74,000 poor and vulnerable households that would be eligible to receive a cash transfer in the event of a shock, and in fact a drought and compounding shocks resulted in a payout for the households. In 2022/23, the mechanism was expanded to cover over 100,000 households in six districts; the long-term goal is to make it a nationwide mechanism. This note summarizes the GoM’s process for establishing this mechanism and presents key results and lessons learned. 

There is also a more detailed technical note highlighting the technical work that was conducted to build the government’s capacity to design a trigger mechanism. You can find the technical note here.