BOGOTA (AlertNet) - Sitting in a damp shack in Altos de Cazuca, a hilltop slum neighbourhood on the outskirts of Bogota, Nancy Diaz nurses her baby.
A street vendor and single mother of three, Diaz receives around $15 in cash from the Colombian government every two months. In return, she must attend health workshops, take her children to regular medical check-ups, get them vaccinated and ensure they attend school at least 80 percent of the time.
Diaz is one of more than 2.6 million Colombians, mostly women with young children living in extreme poverty, entitled to these payments - known as conditional cash transfers - which come with certain obligations.
Despite the initial bureaucratic bottleneck in signing up for the programme and the long queues to get the state benefit, for Diaz it's a lifeline.
"It helps me survive day to day and without the cash I'm not sure how I would put food on the table," she said. "It allows me to have just that little bit more to spend on food, nappies and milk for the children."
Introduced nearly a decade ago, Colombia's conditional cash transfer (CCT) scheme, known as Families in Action, selects recipients by income means-testing and puts money directly into the hands of the country's poorest, mostly those living on less than $1 a day.
Research shows that stunting among Colombian children under two years has been reduced by 7 percent, while incidents of diarrhoea have fallen by 11 percent.
The acclaimed initiative, which started in Mexico during the late 1990s, has now spread to 15 countries in Latin America and reaches around 100 million people.
MILLENNIUM DEVELOPMENT GOALS
Experts say the cash schemes are playing an important role in helping governments advance towards the United Nations Millennium Development Goals (MDGs), which include cutting world poverty by half by 2015, reducing child and maternal mortality rates, and providing universal primary education.
"Conditional cash transfer programmes have helped poverty reduction and increased food consumption among the poor," said Amanda Glassman, a senior health specialist at the Inter-American Development Bank (IDB) who works on the programmes in Latin America. "The research is pretty consistent that CCTs have brought about reduced child stunting in most countries and increased school attendance."
While the impact varies from country to country, Mexico, Chile, Brazil and Colombia are often singled out as success stories in Latin America.
Numerous studies of the model by major funders, including the United Nations, IDB and World Bank, show these countries have made most progress in boosting primary school attendance, especially in rural areas; raising child vaccination rates; increasing use of preventative health services by the poor, such as pre-natal checkups; and reducing rates of stunting Â? a sign of malnutrition - among young children.
It is hoped that cash transfers will lead to better-fed, healthier and more educated children. This in turn can help drive economic development and break the cycle of inherited poverty.
"You are betting on the kids. This is a generational programme. (CCTs) remove the survival issue so families can start to think about other things, like making sure kids go to school and making better choice for their kids," Glassman told AlertNet in a telephone interview from Washington.
One reason why the cash schemes work, analysts say, is that the onus is often placed on women. In Mexico, for example, only women can receive the state subsidies, based on research showing they are more inclined than men to use the payments for food and other basic needs.
"Mothers are less likely to spend the money on cigarettes and drink but (rather) on their children," said Glassman.
MAGIC BULLET?
Once dubbed by Nancy Birdsall, president of the Center for Global Development, "as close as you can come to a magic bullet in development", for most Latin American governments, conditional cash transfer programmes have become the flagship anti-poverty strategy.
But they should not be seen by governments as a panacea and blueprint for reducing poverty, analysts warn.
One major challenge is adapting the schemes, originally set up in rural communities, for urban areas where growing numbers of poor people are settling. The tasks of identifying the long-term poor, keeping up-to-date monitoring records and income means-testing are harder to carry out in large cities.
And the predominance of cash transfers in Latin America has come at the expense of other anti-poverty strategies and social safety nets, diverting funding and attention away from providing better health and education services, critics say.
That harms the effectiveness of the CCT programmes, which are inextricably linked to the quality of those services. Making sure a child goes to school does not guarantee learning or better grades.
"The quality of health and education services is the main issue," said Glassman. "Mexico still has dismal test scores among the poor."
Click here for a factbox on Latin America's conditional cash transfer schemes.
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