The effects of DFID’s cash transfer programmes on poverty and vulnerability
UK aid is succeeding in alleviating extreme poverty through its support for cash transfer programmes
ICAI examined how well the Department for International Development (DFID) used cash transfer programmes to reduce poverty and vulnerability.
The review found that the transfers – which include any regular payments made to individuals or households – had consistently increased incomes and consumption levels among some of the world’s poorest people, and presented a strong value for money case.
The review gave DFID a ‘green-amber’ score, concluding DFID’s cash transfer programmes – which amount to average spending of £201 million a year – were making a good impact, but could achieve even more.
The review found that cash transfers had helped to make vulnerable people more resilient to shocks such as ill health, or bad weather hitting their farms, by encouraging them to save and giving them access to credit.
It found that DFID-supported cash transfers had met some, but not all, of their targets for improving school attendance, and that work on health and nutrition and women’s empowerment, could be improved.
The review acknowledged the importance of DFID’s work with national governments to improve and extend access to cash transfers to the most needy – building sustainable systems and reducing future aid dependency. But it said that there was a lack of a clear, strategic, approach to providing governments with technical assistance, or metrics for monitoring the impact of its system-building efforts.
The review recommended that where there is evidence of national government commitment to expanding coverage, improving value for money and addressing future financial sustainability, DFID should consider scaling up its financial contributions in the short to medium term.
Based on the review, ICAI made a series of recommendations for improving DFID’s performance in cash transfers:
- DFID should consider options for scaling up its contributions to cash transfer programmes where there is appropriate national government commitment.
- DFID should be clearer about the specific aims of its cash transfer programmes, and ensure that these aims are reflected in programme design and monitoring.
- DFID should do more on women’s empowerment in cash transfer programmes, by rigorously monitoring both results and risks and supporting innovation.
- DFID should take a more strategic approach to its technical assistance to national cash transfer systems.