Increasing Impact with Savings-linked Conditional Cash Transfers (CCTs)

How do linking Conditional Cash Transfers to savings accounts help the cause of financial inclusion?
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Field Brief No. 18 discusses how the impact of Conditional Cash Transfers (CCTs) on financial inclusion can be increased by linking them to savings services. It presents three perspectives from panelists at the 2011 SEEP Annual Conference on work being done around savings-linked CCTs in Latin America. The panel’'s discussion highlighted initiatives focused on both increasing the number of CCTs linked to savings accounts and encouraging recipients to build savings and financial assets through the accounts. Presenters discussed savings-linked CCT programs from three distinct perspectives, namely through government alliances, through market-based solutions, and from the financial institution practitioner’s perspective. The discussion highlighted four key elements for sustained success from World Council of Credit Unions’ ProSavings program in Peru and Colombia:

  • Enabling regulatory environment;
  • Appropriate financial education;
  • Demand-driven savings products;
  • Efficient delivery mechanisms or adequate infrastructure to take financial services to people in their communities.

The Brief highlights the importance of linking CCTs to savings accounts and including financial education to provide recipients with a means to enter the formal financial system, gain access to a variety of financial products, and begin to grow their assets.