IN MAKWALO VILLAGE, nestled in the southern district of Nsanje in Malawi — one of the poorest countries in the world, where over half of the population lives in poverty — most people farm, fish, or work as casual laborers. Although lacking in social services, villagers here were traditionally self-reliant, tapping into a robust communal spirit that helped fill the gaps in formal services. People had enough to feed their families and save assets in the form of bags of grain and livestock, according to 38-year-old Meke Nkhandwe, the village chief.

Nearly a decade ago, the southeastern African nation began to see significant climate changes. These included erratic rainfall, prolonged dry spells, and strong winds, all of which have proven challenging for the agricultural nation and its delicate topsoil. In 2015, flooding also shifted the course of the Ruo River, which runs through Nsanje, by a few hundred meters. This rendered the Ruo Bridge, a Malawian government-supported project, defunct; villagers had to rely on canoes for transport.

Still, locals could cope. Thirty-six-year-old Elizabeth Fred, a mother of five from Makwalo, said that even when the Ruo moved, she and her husband tried to view things through a positive lens. For a few years, they saw better harvests on their one-acre plot since inundation from the flooding brought in a wave of extra nutrients from soil washed out upstream. Although their usual fishing dock areas were rapidly silted out and became devoid of catches, the Ruo saw a deluge of schools of small fish, which locals call njole. They enjoyed roasting or frying njole to supplement their diets.

Things changed in 2019, when heavy rains marked the beginning of larger problems for Nsanje residents, many of whom rely on farming and fishing for their livelihoods. “Flooding brought sand, which ruined our plots,” says Fred.

By 2022, most of Makwalo’s arable land was knee-deep in water — the rains brought flood waters that never drained. The following March, Cyclone Freddy — the longest recorded tropical storm in history — killed 679 people and displaced 659,000, according to the Malawian government’s Post Disaster Needs Assessment. The government calculated $506 million worth of total physical damage and economic losses from Freddy, with $45.5 million in Nsanje. Fred and her family were among those displaced by the cyclone, their life savings lost in the wreckage.

Climate change is making these types of extreme weather events more frequent in a country that is already prone to adverse climate hazards. And it is leaving people vulnerable not only to the physical risks of climate change, but to the economic ones as well.

A first-of-its kind program launched by the Scottish government is attempting to address this economic risk, providing Malawians displaced by heightened climate catastrophes — people like Fred — direct funding to rebuild.

FOLLOWING CYCLONE FREDDY, Fred felt like she was living through a bad dream as she and her family, along with more than 10,000 others from the region across nine group villages, moved to Namiyala, a makeshift relocation camp on the grounds of the local primary school. They stayed in those cramped quarters for more than two months. “That was hard, not having space for the family,” she says.

Namiyala, which was an active refugee camp from March to October 2023, was so under-supported, it felt like it was constantly on the brink of collapse. The Malawian army and Red Cross pitched in only 7 gazebo tents altogether, with a mere 200 blankets available for distribution. Despite additional, sporadic support from Catholic Relief Services, Churches Actions Relief Fund Development, and the Malawian Department of Disaster and Relief, there simply were not enough resources to go around.

“We tried to make things equal,” says Elson Labu, 47, a chairperson of the Makhanga Village Civil Protection Committee who stepped up to assume the role of camp manager. “If the household got a torch, you wouldn’t get a blanket. We’d have women stay on one side of the school grounds, men on the other, tried not to split up families. There wasn’t enough food to go around.” Although they had buckets and chlorine for mopping toilets, there weren’t enough of those either. “We had a trachoma outbreak — other camps had cholera outbreaks. There was also malaria,” Labu says.

Despite the best of intentions of a makeshift community police forum, security and theft issues arose. Classes for local students were regularly disrupted — when it rained, the students couldn’t come since displaced villagers crammed into their classrooms for shelter. “It was disruptive for everyone,” Labu says.

Throughout this turmoil, Fred tried not to lament everything she had lost. But she did tally the rough value of her life savings. She estimates that her household lost around 6 million kwacha ($3,459) in goats, pigs, bags of maize, and one cow, not calculating the value of their house. What they had managed to save is no small feat for a place where working adults make roughly 90,000 kwacha ($52) a month.

That’s where Scotland’s loss and damage fund, which it announced at last year’s UNFCCC Conference of the Parties 28 (COP28) and is facilitated by the nonprofit GiveDirectly, comes in. The project, which targets Malawi specifically, represents the world’s first effort to implement “loss and damage” funding. It comes in the form of 1 million GBP in cash transfers to Malawians displaced by climate disaster, with GiveDirectly donors matching Scotland’s support dollar-for-dollar. It’s enough to provide 2,709 households with relocation support: $750, distributed over three monthly payments, for recipients to spend as they please.

In United Nations’ terminology, “loss and damage” refers to the adverse consequences of climate change experienced by developing countries. Funding for loss and damages aims to compensate developing countries for these losses, and is a growing focus of United Nations climate negotiations. So far, countries have pledged nearly $700 million towards this type of work. Scotland’s is the first to be implemented.

When Fred first heard about GiveDirectly last October, as she and her family were being relocated to the “new” Makwalo Village on the other side of the Ruo, roughly 20 km away (a process that involved extensive negotiations between the chiefs of both refugee and ‘host’ villages), she was excited. But it sounded too good to be true. “So many other organizations had come, promising us things, but they never did [them],” she recalls. Only after receiving the first of three cash transfers in December 2023, via mobile Airtel money — GiveDirectly also provided recipients with basic phones to receive the transfers — did she realize that it really would come through.

With the first payment, she bought 50 kg of flour, 15 iron sheets, and bricks. She wanted to build a house for her family to live in instead of the temporary shack they were squeezing into. The second payment allowed her to purchase more food and building supplies, plus some clothing for the children. And with the final payment batch, she paid for labor to construct their home.

In Malawi, the funding is facilitating a shift in disaster relief and climate adaptation strategy, allowing the government to focus on rebuilding in less disaster-prone areas. “For many years, people have been experiencing flooding in their villages, but stay in flood-prone areas,” Charles Kalemba, the commissioner for Malawi’s Disaster Management Affairs (DoDMA) since 2021, says. “The government is changing its strategy to building resilience, rather than responding to annual emergencies.”

DoDMA is currently working with the US Army to demarcate areas that cannot be inhabited from those that can. “Those in flood-prone areas must relocate to higher ground. Nsanje is one of [those] places,” Kalemba says. “We can’t have people repeatedly running away to camps when the waters come, then coming back, and doing it again and again.” In Nsanje District alone, 20,000 households required relocation support in the wake of Cyclone Freddy; thus far, Kalemba estimates that half have received requisite aid.

Until the Scottish fund was launched, this type of relocation was impractical: The Malawian government lacks the resources required for emergency responses, let alone long-term adaptation and mitigation strategies. By helping entire districts like Nsanje relocate, Scotland is offering thousands of villagers a chance to rebuild their lives after experiencing climate catastrophes.

In certain Malawian districts, especially southeastern ones like Nsanje, as high as 73 percent of the population are living in highly climate vulnerable areas. According to the ND-GAIN Matrix — a project developed by the Notre Dame Global Adaptation Initiative, which illustrates countries’ climate resilience via scatter plots — Malawi is the 26th most vulnerable country to climate change and 158th most prepared country in terms of climate resilience. The west, Kalemba says, has an obligation to assist countries like Malawi to address this imbalance. “We didn’t contribute to a lot of the problems we are facing now.”

According to Tom Mtenje, a senior manager at GiveDirectly, loss and damage’s future trajectory is currently being negotiated, including who will receive funding and how it will be accessed. The topic will likely be featured at November’s COP29 in Azerbaijan.

“Our work provides a proof of concept that direct cash grants to people at the frontlines of climate disaster is a feasible and effective modality for loss and damages fund disbursement,” he says. “[Hopefully] a meaningful portion of the $700M and however much more is mobilized can be available through a community access window.”

FRED AND HER HUSBAND no longer fish since their old sites are no longer abundant. They work as casual laborers, fetching water and building bricks. Fred is happy and relieved about the assistance that went toward her new brick home: “I don’t know what we would have done without it.”

She does return occasionally to tend to the sliver of her farmland, where the water has receded, in the old Makwalo Village, more out of optimism than anything else. This is the first time she’s returned to visit their old home — she had feared the path would be completely overcome by brambles. The thickets are overgrown indeed, but the worn dirt path is still there. We stand, looking at the rotting and battered frames of her old abandoned home, where so much life had happened.

“I think about the climate a lot, it’s changing all the time,” she says. Although with GiveDirectly’s support she’s been able to build a new house, there was no money left over for her to help start a new business — Fred expressed interest in setting up a phone-charging kiosk or small restaurant, if she had the capital. Before we leave, she wonders aloud, “Do you think GiveDirectly might return here sometime?”