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 awarded DFID a ‘green-amber’ score concluding the cash transfer programmes – which amount to an 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 effecting 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.

However, it said 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.

Recommendations

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.

Government response

The government publishes a response to all ICAI reviews. You can read the government’s response to ICAI’s review of DFID’s cash transfer programmes online.

International Development Committee

Parliament’s International Development Committee (IDC), or its ICAI sub-committee, hold hearings on all ICAI reviews. You can watch the IDC hearing on our review of DFID’s cash transfer programmes online.

ICAI’s follow up

This review will be included in ICAI’s next follow up report, due to be published in summer 2018.

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Published
12 Jan 2017
Assessment
Green - Amber
Lead commissioner
Alison Evans
Subjects
Social protection
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