A booster to conditional cash transfer programme: experimental evidence on financial inclusion and livelihood enhancement project

While Conditional Cash Transfer (CCT) Programmes have contributed to sustained economic growth in many countries, existing evaluations show that the Honduran CCT programme has only a modest impact on poverty. This study examines a causal impact of a training project on financial inclusion and livelihood enhancement conducted as a booster to increase the effectiveness of the CCT programme. Based on a graduation approach, the project provides multi-faceted interventions to randomly selected CCT beneficiaries. We estimate intention-to-treat effects and find that the interventions significantly increase financial literacy and inclusion, including knowledge of financial institutions, financial accounts, bookkeeping, and pro-saving attitudes. We also find that the treated individuals in rural areas gain significant income from business, livestock farming, and agriculture by switching employment. Importantly, we find evidence that the interventions contribute to female empowerment by changing the intra-household decision-making process. The impact is much larger in rural areas, where financial markets are underdeveloped, and the traditional gender pattern is more prevalent. The intervention seems to reduce the urban-rural gap.