Abstract:
Cash Transfers (CT) as a strategy for poverty reduction acquired prominence in Latin
America but spread later to the rest of the developing world including Tanzania. Government through
its umbrella institution, Tanzania Social Action Fund (TASAF) introduced what has become the largest
CT for poor households in the country since 2010 to date. Although there is growing evidence on the
impact of CT on poverty reduction, results are contextual. Thus, the paper examined the causal effect
of CT on poverty reduction in Lindi District, Tanzania. Specifically, the study assessed the impact of CT
on households’ overall wealth, housing conditions, use of basic services, productive and non productive assets. The study employed Propensity Score Matching (PSM) to estimate the effects of CT
on households by matching recipients and non-recipients’ households using Nearest Neighbor, Radius
caliper and Mahalanobis matching techniques. Sample size constituted 398 respondents, split into
equal number of recipients and non-recipients’ households. Five Focus Group Discussions (FGDs) and
13 Key Informants Interviews (KIIs) were conducted. Qualitative data was analysed using content
analysis. Findings indicated that CT to poor households by itself is not enough to significantly reduce
extreme poverty. However, the results indicated significant effect of CT on five poverty indicators
which are type of floor, sanitation facilities, livestock, mobile phone and chair. The study recommends
to government adoption of multi-intervention programs directed on key living standard indicators
such as productive assets to transform the quality of low-income households.
