The combination of economic, health, and social vulnerability put children at serious risk. In a cruel example of intergenerational disadvantage, orphaned youth were nearly twice as likely as non-orphans to engage in risky sexual behavior. This made them more vulnerable to contracting HIV or other sexually transmitted infections and experiencing early pregnancy.^source

Kenya had mechanisms to care for children following the loss of their parents or other serious trauma, but the unprecedented scale of the AIDS epidemic strained traditional support structures. Orphans crowded into a dwindling number of available foster homes, led by an ever-shrinking number of healthy, working-age adults. Caregivers struggled to make ends meet as HIV stigma and the costs of food, healthcare, and school fees accumulated. Compounding these challenges, orphans could themselves be HIV positive, or placed in the custody of ailing caregivers with HIV.

Concerned for the welfare of Kenya’s most vulnerable citizens, the United Nations Children's Fund (UNICEF) galvanized Kenyan public opinion and political will to support a novel social protection program. Leading up to parliamentary elections in 2002, UNICEF engineered a Call to Action campaign, demanding free access to education and increased resources for social protection for OVC. The campaign included TV and radio ads, blanketing public spaces with advocacy posters, and media interviews with UNICEF country director Nicholas Alipui.^source Efforts resulted in over 350 parliamentary candidates, including 100 elected candidates and incoming President Mwai Kibaki, pledging to meet UNICEF’s call.^source

Once in office, the new administration followed through on its promise: it abolished school fees and began planning a series of steps to assess and pilot social protection policy options. One strategy, first floated by vice president and minister of home Affairs Moody Awori was cash transfers. The idea elicited caution and intrigue among government officials. Some were concerned recipients would squander the funds instead of investing them in the children’s future. Others noted cash transfers were a cost-effective intervention with success in other parts of the world, such as in Latin America.^source

In 2004, UNICEF helped the Kenyan government roll out a "pre-pilot" program to assess operational feasibility and potential impact in three districts, providing 500 ultra-poor households caring for OVCs with a monthly KES500 (US$6.50) transfer. The program showed promise: it helped families purchase basic necessities such as food and school supplies, and beneficiaries were less likely to sell their few assets. Firsthand observations by high-ranking government officials helped further dispel fears about misuse of funds and solidify support for scale-up.^source

Having demonstrated that cash transfers were feasible and likely beneficial, the Kenyan government soon embarked on a phase 2 expansion. With support from UNICEF and the UK's Department for International Development (DFID), the government increased the transfer amount to KES1,500 (US$20) per month and reached 15,300 households by 2008.^source A randomized evaluation of the expansion found impressive gains in children’s health and welfare, helping sustain donor and political commitment.

The cash transfer program was a highly collaborative effort, involving more than a dozen ministries and other government bodies. High-level leadership came from the National Steering Committee for Orphans and Vulnerable Children, including representatives from the Ministry for Home Affairs and international organizations.^source In the Department of Children Services, a Central Program Unit handled day-to-day operations. At the district level, committees supported targeting and follow-up. And at the village level, volunteer community representatives helped spread the word among families who might qualify.^source

Kenya’s booming economy and subsequent rise in tax revenue also enabled a growing government contribution and continued expansion of the program. With combined financing from the government, the World Bank, DFID, and UNICEF, transfers reached 280,000 children in 134,000 households annually by 2012.^source 

Still, resource constraints remained, which meant available funds had to be prioritized. Program leaders thus developed a multi-stage targeting process to identify and enroll the neediest OVC households.^source Families that qualified picked-up 3,000KSH ($40) at their local post office every two months. Notably, however, this amount was the same across households, diluting the transfer’s impact in larger households with greater numbers of children.^source

Between 2007 and 2009, the program experimented with making the transfers conditional. One group of beneficiaries received a no-strings-attached transfer, while the other had to ensure children's full vaccination and regular school attendance, among other conditions, to get the full amount. Evaluation results showed that conditions were poorly understood and only loosely enforced; they were discontinued during further scale-up.^source 

Byearly 2015,about 240,000 households and 480,000 children were benefitting from the cash transfer.^source The program’s benefits were substantial and wide ranging. The transfer improved overall consumption, resulting in a 36 percent reduction in absolute poverty and an increase in food and health expenditure in the short term. Although measures of malnutrition, such as height and weight for age, did not significantly improve, the benefit did translate into healthier diets: beneficiaries were more likely to consume milk, fish, and meat and have a more diverse diet.^source

Four years after the program’s introduction, receipt of cash transfers had decreased the odds of sexual debut among adolescents and young adults of both sexes by 30 percent, and by more than 40 percent among girls. For girls who were already sexually active, the program was associated with an 80 percent reduction in the odds of having multiple sexual partners in the past year—an important driver of the HIV epidemic. Girls and young women were also less likely to get pregnant, a result closely linked to school enrollment.^source

In the pilot phase (2006- 2009), the program spent a total of KES776.7 million (US$9.96 million) across seven districts. The government disbursed KES383.3 million (US$4.9 million) directly to 15,000 households and spent another KES393.4 million (US$5.04 million) on program setup, rollout, operational costs, and monitoring and evaluation.^source

The scale and cost of the program quickly exceeded an initial projected cost of US$126 million for 2009 to 2016.^source In the 2013-2014 fiscal cycle, the Kenyan government allocated KES7.5 billion (US$85 million) to provide transfers to over 310,000 Kenyan households.^source This included US$8 million from DFID, ^source plus support from a second World Bank loan (a value of US$250 million over the period 2013-2018).^source

The balance of expenditure on the transfers and on other costs sheds light on the efficiency of the program. By 2008-2009, the program’s cost-transfer ratio (a metric that captures the efficiency of transfer programs, comparing administrative to transfer costs) was 0.34.^source This was comparable to the ratio found for Oportunidades in Mexico—one of the world’s most efficient cash-transfer programs.

The transfers were also an essential investment into the local economy due to increased economic activity of beneficiary households. Using a model to assess the economic impacts of cash transfers, the Food and Agriculture Organization estimated that the local economy benefitted by US$1.34 to US$1.81 for every US$1.00 transferred in two districts where the Kenya program was implemented.^source

The cash transfer program offered a good solution for tackling the HIV-driven OVC crisis. By supplementing ultra-poor households caring for vulnerable children, the transfer enabled caregivers to cover urgent expenses while keeping children in familiar homes within their own communities. Rigorous evaluations verified that the supplementary income was driving positive change, which helped spur and maintain political and donor support over many years.

Although it prospered with the help of donor financing and technical-know how, the program was a Kenyan initiative at heart. It was conceived, championed, and administered by Kenyan leaders, and expanded under the auspices of a 2010 constitutional revision guaranteeing Kenyans’ right to social security.^source  The program even survived political tumult and changes in national leadership due to backing across party lines. Kenya’s buy-in was also financial: government funds covered more than 60 percent of program households by the 2013-2014 fiscal year, helped along by a booming economy and rising tax revenue.^source

Kenyan support was bottom-up as well as top-down. Recipient communities had a favorable impression of the transfer and generally believed the neediest families were benefitting. Baraza community meetings helped sustain accountability and community support.^source 

Although general enthusiasm for the program was at times tempered by confusion and misinformation, most recipients expressed high satisfaction with the distribution process. This was especially true after a biometric payment system was introduced, offering greater flexibility in the time for collecting the transfer as well as a sense of security.^source

The program's targeting mechanism was also a success. The evaluation found that 97 percent of recipient households cared for OVC and 99 percent of beneficiary households fell below the program’s poverty threshold. Recipient households were also slightly poorer than their neighbors with vulnerable children who did not receive the transfer. However the first wave of expansion left many behind: only about a quarter of the poorest eligible OVC households enrolled, even as many substantially better-off families received the benefit. Further expansion enabled more of the very poor to enroll, but ensuring equitable allocation of funds remains a pressing concern.^source

Cash transfers have had substantial success around the world, most notably in Latin America and increasingly in Asia and sub-Saharan Africa. But unlike many other programs, Kenya’s social cash transfer program was born of the HIV crisis, implemented in a low-income setting, and targeted a specific population of the ultra-poor. Kenya demonstrated that even low-income countries can afford modest social protection measures despite tight budgets, weak infrastructure, sparse public services, and limited government capacity.

Although these cash transfers were not explicitly designed to improve children’s health, they yielded broad overall gains in beneficiaries’ quality of life. Children in need who received the transfer ate better, stayed in school, and reported higher levels of general well-being. And by keeping vulnerable kids with trusted adults and out of orphanages, the transfer helped avoid the many negative consequences of prolonged institutional care, including high costs, elevated risks of sexual abuse, and stunted cognitive and emotional development.^source