A national Stakeholder Workshop on Human Development and Social Protection was organized by the Nepalese Ministry of Local Development to inform the stakeholders on one of its Pilot initiatives – The Human Development and Social Protection Pilot project (HDSPP) undertaken by MLD. The project is being pilot tested in Kanchanpur and Dadeldhura districts with funding support from the UN Capital Development Fund (UNCDF) and the World Bank (WB). The pilot initiative involves the Ministry of Local Development (MLD) as well as the Ministry of Education (MoE) in the management of a cash transfer payment to poor households. The initial time-frame for the project is 2 years with an estimated cost of about USD 4 million and it will benefit an estimated 24,000 children of school going age in the two pilot districts.

The HDSP intends to make a significant contribution to the development of MLD’s collection and management of data. Household registration in the 2 pilot districts will build upon and expand the current Vital Events Registration work at the lowest level of government. The data base will not only enable household targeting for the pilot, but provide a data base for the local government to work with for development.

The HDSP is the first social protection project in Nepal to include poverty targeting. This runs counter to the present practice in Nepal of working with categorical targeting or universal targeting. Targeting will test two approaches, one based upon the Multi-Dimensional Poverty Index (MDPI) and the other using a Proxy Means Test (PMT). By doing this, the Pilot will test whether it can effectively target the poor and do so in a way that can be implemented at the village level. An advantage of effective targeting is that one can achieve a stronger pro-poor impact with a limited amount of resources.

Another important component of the HDSP is the promotion of financial inclusion of poor households by providing cash payments through formal financial service providers (commercial banks, credit unions, etc.). In addition to helping poor households to access formal financial services such as savings and credit, this is also likely to enhance the efficiency of the payment process and eliminate leakage of funds in the process of payment. This could contribute significantly to the effectiveness of the Government of Nepal’s education cash transfers as well as the efficiency of the many other Government social protection payments that pass through local governments (old age pensions, disability grants, child grants, widow’s grants, etc).

HDSP will include enhanced grievance and redress mechanisms, which will provide a direct channel of communication between the recipients and the government institutions responsible for the transfer, facilitating early identification of problems and minimizing the risk of inclusion and exclusion errors in the selection of households. This will also enhance transparency and accountability in the selection and payment of the cash transfers.

HDSPP will therefore be linking the supply and demand sides of service delivery by taking local governments as its entry point. Village Development Committees (VDCs) and District Development Committees (DDCs) will be responsible for the management of the pilot while local citizens and their communities will be required to be active participants in the project.

Taken together with other UN agencies’ support (UNDP, UNICEF, UNFPA, UNWomen and UNVolunteers) to the Local Government and Community Development Programme (LGCDP) UNCDF’s and the World Bank’s HDSP pilot will help in making quality services such as education more accessible to those who have the greatest need for them. HDSP pilot builds upon the LGCDP’s focus on linking citizens to local governments through Ward Citizen Forums, Citizen Awareness Centres and Social Mobilizers, all of which will be critical to ensure that poor households in the community benefit more from government services, thereby improving the conditions of the community as a whole.