WASHINGTON, May 4th – A new report examines the ways in which linking conditional cash transfer programs to savings accounts could accelerate economic inclusion and reduce poverty for millions of families. Released today by the New America Foundation, along with the Ford Foundation, the Citi Foundation, the United Nations Development Programme, and Proyecto Capital, the report summarizes key ideas and insights that emerged from a two-day expert global colloquium on the topic held last November at the Ford Foundation in New York City.
CCT programs—recognized in January by the New York Times as “likely the most important government anti-poverty program[s] the world has ever seen”—direct funds toward qualified households or individuals if they fulfill certain requirements like visiting health clinics or making sure their children attend school regularly. In Brazil, CCTs have seen the number of poor drop from over 20 percent of the population to less than 10 percent in a six year span. In Mexico, CCTs were associated with a decline of over 20 percent in the poverty gap.
As these programs expand around the world, advances in mobile payments now offer the opportunity to leverage the success of CCTs even further. By linking CCTs to electronic delivery, and in particular to savings accounts, governments can help offer the poor a path to financial inclusion and wealth building, helping to break the inter-generational cycles of poverty.
The report was released at a public forum at the New America Foundation on May 3rd that brought together leading experts from banking, government, international development and philanthropy to explore this new approach. Video of the event can be found here.
Jamie Zimmerman, Director of the Global Assets Project at New America, expressed optimism that linking savings and CCTs could transform the way both the social protection and financial inclusion fields approach poverty reduction. “As the Savings-Linked CCT concept gains real traction, so does the opportunity to work together to innovate with what could be one of the highest leverage anti-poverty, pro-empowerment tools yet,” said Zimmerman.
“With CCTs already reaching some 25 million families, we believe that we face a transformational moment in the global fight against poverty. Building an enhanced approach to these proven programs could significantly deepen their impact, and we’re supporting efforts to pilot enhanced CCT programs with savings throughout Latin America,” said Frank DeGiovanni, director of Financial Assets at the Ford Foundation.