PROYECTO CAPITAL - Written by Carlos Chiapa
In this paper, we study the possibility of expanding access to the financial system to the poorest sector of the population through the use of savings accounts, by means of an institutional change in the way conditional cash transfer programs (CCTs) operate. In particular, we discuss the potential benefits, challenges and conflicts that would be created if CCTs chose to deposit the transfers they grant recipients directly into savings accounts.
Because of the scope of CCTs worldwide nowadays, this institutional change has the potential to affect millions of people. Combining financial inclusion and CCTs is not a new idea. Various CCTs have started moving in that direction, modifying their payment systems (Maldonado, Moreno, Giraldo Pérez and Barrera Orjuela 2011). Nevertheless, the idea of trying to achieve greater financial inclusion by combining CCTs and savings has been little explored.