Following the declaration of COVID-19 as a pandemic in 2020, governments and humanitarian organizations ramped up their adoption of cash transfer services in order to reach vulnerable populations.
As of April 2020, a total of 151 countries had planned, introduced, or adopted 684 social protection measures in response to COVID-19. But experts say recipients of cash transfers find it difficult to save and cater to their long-term goals.
Research found that poverty can increase risk aversion and discourage long-term investments. Kate MacLeod, a behavioral scientist with ideas42, a nonprofit design and consulting firm, said she has seen this happening with cash transfer beneficiaries.