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Digitized Government Transfers & Credit for Cash Transfer Beneficiaries

Financial Inclusion Dominican Republic

Conditional cash transfer (CCT) programs face the common challenge of fully “graduating” beneficiaries, or lifting them out of poverty completely. One potential solution is to utilize the digitization of CCTs by offering linked lines of credit to beneficiaries, allowing them to make productive investments and better manage their finances. In partnership with the government of the Dominican Republic and multiple DR banks, the research team is rigorously evaluating a novel credit product that allows beneficiaries of the national cash transfer program, Solidaridad, to borrow small amounts and automatically repay through their benefits stream. Specifically, the study aims to explore 1) the impact of the new credit product on productive investments, profits, income, future consumption and well-being for beneficiaries of Solidaridad; 2) whether the new product can facilitate graduation from Solidaridad both in the short run and long run (and if so, which product features contribute to it). Results forthcoming.

Partners
  • Government of the Dominican Republic
  • Banco ADOPEM
  • Banco BHD León
  • Banco ADEMI
  • IPA (Dominican Republic)
Funding
Timeline

2016 — ongoing

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