The positive effects of conditional cash transfer programmes (CCTs) in Latin America have led to the recommendation that CCTs should be promoted. This may be premature since there is not much knowledge about the critical factors that have led to the positive results. Areas suffering from humanitarian crisis, insufficient food supply and poor connection to the nearby markets should not be considered for cash transfer programmes. Several policy implications are identified: (1) The implications of conditionality should be carefully assessed before embarking on these types of programmes as they tend to exclude the most vulnerable groups. (2) One will usually get more poverty reduction for the budget by using broad targeting. (3) Gender equality should be a part of the overall design. (4) Rigorous impact evaluations of universal cash transfer programmes may be important for their future popularity.