FIELD Brief 18: Increasing impact with savings-linked conditional cash transfers – experiences from Latin America

FIELD Brief 18: Increasing impact with savings-linked conditional cash transfers – experiences from Latin America

Government social protection programs in 30 countries provide conditional cash transfers (CCTs) to economically disadvantaged families who meet certain requirements (conditions), such as sending their children to school regularly, participating in nutrition programs, and visiting health clinics. Evaluations of CCT programs have been positive, revealing improvements in economic and social outcomes as a result of increased investments in health and education.

Now, policymakers, donors and practitioners in the social protection and financial services fields are collaborating to increase the impact of CCTs by linking them to savings services as an avenue to expand financial inclusion. Currently, nearly 75% of programs distribute CCT payments in cash through delivery mechanisms that do not link the payments to accounts. Of those that do use financial accounts, few encourage recipients to retain a portion of the CCT proceeds in the account as savings.

In Latin America alone, an estimated 24 million people—primarily women—receive CCTs through 17 government programs, which are often administered by ministries of social development or through independent agencies within the presidency, and banks are often responsible for distributing the payments. However, in most cases, banks act merely as payment agents on behalf of the government and do not offer financial services, particularly savings accounts, to the largely unbanked CCT recipients.