Understanding the Nuances and Complexities of Cash Transfer Program Beneficiaries and Administrators Using Capabilities and Asset Effect Lens

Background and Purpose: Poverty is mostly equated to the lack of financial resources; thus, poverty alleviation in some countries has mainly focused on supporting low-income households with cash transfers to reduce poverty. In some cases, people who receive cash assistance have better financial conditions. However, this improvement might not last if the help does not fully support their “opportunity to act” and “ability to act”, according to the financial capability framework. Guided by the two frameworks—the capability and asset effect frameworks—this study explores the contributions of cash transfer programs and existing gaps.

Methods: Using Ghana’s cash transfer program as a case study, qualitative research methods were used to amplify the voices of program beneficiaries and administrators to understand the nuances and complexities of their experiences. Open-ended surveys, in-depth interviews, and obtrusive observations were used to gather data from fifteen purposively sampled beneficiaries and four administrators of Ghana's Livelihood Empowerment Against Poverty (LEAP) program in the Accra Metropolitan Area. Data collection from the beneficiaries occurred at cash payment events while the program administrators were engaged in their offices. Triangulation of the open-ended survey and in-depth interview data, and the observation notes started from the data collection stage and continued throughout the data analysis. After transcription, systematic coding and thematic analysis were conducted using ATLAS.ti software, providing insights into patterns in beneficiaries’ and administrators’ experiences.

Results: There was a shared sense that cash transfer programs have contributed to poverty alleviation among beneficiaries; however, the overwhelming evidence points to limitations in four domains: (1) insufficient reach to the most marginalized population, (2) inadequate cash grants, (3) beneficiaries' misuse of funds, and (4) limited focus on economic capacity building. The misaligned grant allocation was attributed to political interference in enrollment to attract election votes, while fund misuse was partly attributed to beneficiaries' limited capacity to channel their funds into economically profitable ventures. Policy and program ideas that emerged as viable strategies to enhance the program’s capacity to improve participants’ livelihood prospects fell under three domains: (1) financial capability competencies, (2) vocational and technical skills training, and (3) psychosocial support. Participants felt that business skills and financial management training could support small business development and the judicious use of financial resources, all of which could help with better fund management.

Implications and Conclusion: From the perspective of the financial capability framework, cash transfer programs prioritize people’s “opportunity to act” through cash grants (albeit inadequate funds), but there are limited investments in their “ability to act,” which could be achieved through financial capability competencies and skills training. According to the asset effect framework and emerging evidence, cash transfer programs’ investment in both “opportunity” and “ability” could better support the economic security and stability of beneficiaries and address the third gap (i.e., psychosocial support). Thus, there is a need for more research on how skills training and economic capacity-building tools can complement cash transfer programs. Additionally, implementing clear and strict guidelines for targeting and enrolling beneficiaries will reduce enumerators’ discretion and bias.