Enhancing the Impact of Cash Transfers: The Latest Trends toward Savings-Linked Social Protection

This paper explores opportunities and challenges in advancing innovative, cost-effective, and high-impact social protection policies. It supports the advancement of sound, effective, and efficient savings-linked social protection models.The paper examines the increasing emphasis on long-term, integrated interventions to build the physical and financial assets necessary to graduate from poverty. It analyzes the shift toward electronic payments, and developments in payment infrastructure that are accelerating the development of financial asset building. It concludes by discussing how trends in program structure and payment infrastructure can promote financial inclusion through social protection payments. Conclusions include:

• Long term programs enable savings-linked social protection efforts by facilitating long-term, systematic investment from the private sector, and helping recipients to modify their savings habits;
• Savings-linked approaches to social protection emphasize the gradual building of assets to graduate from poverty;
• Graduated approaches to asset building can also open up opportunities for financial service providers;
• Delivering social protection payments via mobile phones will help to reach the unbanked in remote locations, and introduce formal financial services to poor households;
• Efficient and speedy payment systems require a strong identification system, such as biometric technology, to ensure that the proper beneficiaries receive the payments.