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Savings-Linked Conditional Cash Transfers

There is an increasing, and arguably inevitable, overlap between the financial inclusion and social protection fields. The success of conditional cash transfers (CCTs)—antipoverty social policy programs that direct funds toward qualified households or individuals based on a conditional behavior, such as children’s school attendance—has resulted in substantial investment and experimentation.

As these programs have expanded around the world, so too has interest in an intriguing new idea: linking these programs to savings accounts, thus offering a new pathway to both financial inclusion and asset building, and ultimately to poverty reduction.

Because of their cash-based structure, account-based social protection programs could be leveraged to accelerate financial inclusion for the poorest. Due to their behavioral impacts, account-based CCTs to the poor may achieve even greater welfare benefits and poverty reduction than unconditional transfers if they can influence savings behavior and asset building. Meanwhile, experts suggest that within the decade, technological breakthroughs will make financial access to the majority of the world’s currently unbanked population possible.

For two days in November 2010, the Global Assets Project at the New America Foundation, the Ford Foundation, the United Nations Development Programme, the Citi Foundation, and Proyecto Capital convened 100 leading practitioners, researchers, policymakers, and funders from the financial-inclusion and social-protection fields at a Global Colloquium on Savings-Linked CCTs. The purpose of this first-of-its-kind colloquium was to inform strategies to creatively and constructively deepen and strengthen dialogue, analysis, experimentation, and, ultimately, innovation at the intersection of savings products, behaviors, and social-protection payments.

This report provides a glimpse into the wealth of information—trends and insights, lessons and challenges, new ideas and next steps—provided so candidly and generously by participants at the colloquium in New York. Foundation