The BONOSOL pension to elderly Bolivians put a sizeable cash transfer in the hands of a large group of impoverished households. This study finds positive effects of the program on household consumption and children’s human capital, consistent with previous research on cash transfer programs in developing countries. However, the increase in food consumption for impoverished households in rural areas is equivalent to over one and a half times the value of the pension. A significant fraction of this increase is derived from consumption of home produced agricultural products such as meats and vegetables. These results suggest that cash transfers to poor and liquidity constrained households may facilitate productive investments which boost consumption through multipliers on the transfer. This proposition is supported by evidence that beneficiary households in rural Bolivia increase animal ownership, expenditures on farm inputs, and crop output, although the specific choice of investment differs according to the gender of the beneficiary. These results are consistent with the presence of credit constraints that limit poor households’ ability to invest, and suggest that cash transfers may be an effective way to reduce extreme poverty, as poor households with under-capitalized assets and opportunities put the transfer to work.