Savings-Linked Conditional Cash Transfers

ABSTRACT: This policy brief makes the case for linking conditional cash transfers to savings as a two-pronged poverty reduction strategy of supplementing income and building productive assets, while increasing effective financial inclusion of a given population. While conditional cash transfer (CCT) programs and policies have proven effective in achieving certain poverty alleviation goals, such as better health and education, only recently have we begun to explore the potential of CCTs to enhance economic inclusion and poverty reduction through wealth accumulation. The global proliferation of CCTs-- due to their immense popularity, coupled with recent innovations in their design and delivery-- present us with a ripe opportunity to explore new policy pathways to achieve poverty reduction through large-scale financial and economic inclusion for millions of the world's poor. The authors look at current programs through a financial inclusion and asset-building lens, drawing lessons for policymakers who wish to gain greater returns on their social investments by enhancing the effectiveness of their current, proposed, or potential CCT programs.