For years, the global community has grappled with the formidable challenge of eradicating extreme poverty, a pivotal target of the Sustainable Development Goals for 2030. Despite some strides, we remain alarmingly off course, with an estimated 700 million individuals still trapped in the daily struggle to survive on less than $2.15. Yet, amidst this persistent dilemma, a promising solution emerges direct cash transfers to the most impoverished households.

The concept itself is not novel. Cash aid has demonstrated its effectiveness, particularly in crisis scenarios. Notably, during the COVID-19 pandemic, one out of every six individuals worldwide received some form of cash assistance. Direct transfers serve as potent instruments for empowering individuals to seize control of their destinies and invest in the well-being of their families. Consequently, high- and middle-income nations are increasingly integrating cash aid into their social safety nets. Despite this, a meager fraction—less than 5%—of the $200 billion annual international development expenditure is allocated to cash transfers.

The evidence supporting the positive impact of cash transfers is compelling and wide-ranging. Insights gleaned from over 300 randomized control trials affirm their ability to significantly enhance incomes, boost school enrollment and entrepreneurial endeavors, mitigate instances of hunger, illness, and mental distress, and curtail domestic violence. Crucially, they neither diminish work hours nor fuel expenditures on vices such as tobacco and alcohol. Moreover, every $1 transferred yields a spillover effect of approximately $2.50 within the local economy. Even three years post-transfer, recipients continue to exhibit elevated earnings and educational attainment. Recent findings from Kenya underscore the effectiveness of a $500 lump-sum cash transfer in empowering families to make lucrative investments.

Moreover, technological advancements now facilitate the widespread dissemination of direct transfers to the world’s neediest populations. Innovations in digital technology have substantially reduced costs and expanded our capacity to securely deliver funds to the most remote corners of the globe. During the pandemic, Togo harnessed mobile phone data and satellite imagery to identify and assist individuals requiring relief. Through its NOVISSI initiative, Togo leveraged basic USSD technology on all mobile devices to reach and validate recipients, disbursing $34 million to 920,000 beneficiaries. Bolstered by World Bank support, Togo’s successful pilot program is now slated for expansion to a $100 million endeavor.

India’s rapid enrollment of 1.3 billion individuals in its digital ID system within a span of six years has similarly paved the way for exponential growth in digital payments, facilitating seamless cash transfers to even the most remote regions.

With numerous successful programs demonstrating the efficacy of cash transfers, the imperative now lies in globalizing this solution. Drawing upon insights from an international working group, we advocate for the establishment of a new global fund dedicated to eradicating extreme poverty through lump-sum direct cash transfers. This initiative would enable nations to amplify their utilization of digital cash transfers, either by expanding existing social protection schemes or initiating new ones. Financing for this endeavor would be sourced from a blend of philanthropic entities, institutions, and governments, akin to the financing model of the Global Fund to Fight AIDS, Tuberculosis, and Malaria. Crucially, these transfers would not serve as substitutes for existing interventions but rather as complementary measures.

Indeed, if families continue to grapple with limited access to essential services such as healthcare, education, and employment opportunities, additional cash injections may yield limited impact. However, when deployed in tandem with broader initiatives, the benefits of cash transfers extend far beyond the initial disbursement. Individuals and families equipped with mobile money accounts gain access to a financial safety net, enabling them to save, launch businesses, or receive remittances from abroad. At scale, this infrastructure accelerates financial inclusion in underserved communities and empowers national governments to extend emergency cash support during crises while providing enduring benefits to vulnerable demographics.

While direct transfers alone may not single-handedly eradicate extreme poverty, they represent a tangible initial stride toward catalyzing broader action. Analogous to the strategy employed in combating HIV, where the distribution of anti-retroviral treatment preceded comprehensive health system reforms and behavioral change initiatives, a swift, unified inaugural step can render a seemingly insurmountable problem more manageable than previously envisaged.

In today’s world, it is untenable that millions of families continue to grapple with food insecurity and inadequate shelter, depriving children of the opportunity for holistic growth and education. This form of poverty not only inflicts profound suffering but also constitutes a tragic squandering of human potential.

By simultaneously enhancing numerous outcomes, cash transfers present a transformative remedy to multidimensional poverty. Already proven effective, adaptable, and replicable, their realization is increasingly within reach as mobile coverage and digital infrastructure proliferate. This diffusion of technology heralds a historic opportunity to break the cycle of extreme poverty and despair. For the first time, the world possesses both the financial means and the methodological tools necessary for success. The question that begs: What are we waiting for?