“It’s always important to save. You never know when you’re going to need something and not have money (…) for when your children get sick or something like that (…) it’s a good way to buy things, or to start a business.”
Yaneth Flores Vargas is just one of the success stories to emerge from the pilot savings program of Familia JUNTOS, the focus of a recent workshop – “Conditional Cash Transfer Programs and Financial Inclusion: An Encounter in Progress” – that the New America Foundation’s Global Savings and Social Protection initiative attended in Peru.
A mother of two with a high school education, Vargas always enjoyed knitting sweaters, but before joining Familia JUNTOS she needed to raise pigs in order to support her craft. Since joining, she has been able to save enough to purchase a knitting machine – which she learned how to use from reading magazines – and is now earning enough to support herself and her family. She hopes to eventually save enough to buy more machines and start a business, in addition to sending her kids to college.
In addition to visiting participants in the pilot savings program, Proyecto Capital’s workshop, funded by the Ford Foundation and the International Development Research Centre (IDRC), explored the general promise of linking conditional cash transfer (CCT) programs such as Familia JUNTOS to asset building. The event was co-organized by Caroloina Trivelli, Peru’s newly appointed Minister for Social Inclusion, and attracted a variety of stakeholders from the fields of social protection and financial inclusion in Latin America, South Africa and North America. Workshop sessions covered topics including financial education and mobile banking, the comparative experiences of Latin and America and South Africa in linking CCTs to savings, and financial products that could be included in the portfolios of the rural poor.
The results (in Spanish) of the pilot savings component of Familia JUNTOS, which was launched in 2009, are particularly inspiring. Although the women in the program were initially skeptical about their savings accounts, over time they came to trust that their money would be available from the bank when desired. As a result, they have been able to plan for anticipated educational and family costs, be better protected against emergencies, and in cases such as Yaneth Vargas, advance their dreams of starting their own small businesses.
The New America Foundation’s Global Savings and Social Protection initiative is currently researching and expanding upon these findings to uncover the where, when, why and how of linking asset building to government cash transfers. If the early results from Peru are any guide, the outcome will be nothing short of remarkable.