> Posted by Guy Stuart, Ph.D., Executive Director, Microfinance Opportunities
Can government-to-person (G2P) payments to low-income beneficiaries translate into their financial inclusion? One way this might happen is if those beneficiaries can gain experience in dealing with a formal financial service provider (FSP) when they go to pick up their payments. This is especially the case where the government pays the beneficiaries of the program through a digital channel, such as a debit card or mobile money, and the payment pick up process gives beneficiaries the chance to interact directly with this new technology. Furthermore, given that G2P programs are often targeted at women, there is the potential for these programs to increase the inclusion of the half of the population traditionally more excluded from formal financial services.
As part of the Center for Financial Inclusion Fellows Program, Microfinance Opportunities, in partnership with the Pakistan Microfinance Network and Centro de Formación Empresarial de la Fundación de Mario Santo Domingo, looked at this issue as part of a larger project on the relationship between G2P payments and financial inclusion. For this project we analyzed global survey data as well as conducted field research in Colombia and Pakistan—two countries with large, well-established G2P programs called Familias en Acción (Familias) and the Benazir Income Support Program (BISP) respectively. The field research involved focus group discussions with the beneficiaries of the programs and, in Pakistan, a series of observations of transactions at the shops of agents of one of the commercial banks distributing payments to the beneficiaries of BISP.
The focus group discussions with the beneficiaries of the Familias program in Colombia showed the potential of G2P programs to have a direct effect on enabling women to become comfortable with using digital channels to receive money. The women unanimously reported that they used their Familias debit cards to withdraw their G2P payment from an ATM without any help from anyone else. They did report that, at first, they needed help, but soon learned how to use the cards themselves without any problem.
“… I have the money today and we can withdraw it in just 5 minutes, right? I think it is easy.” (La Calera, Bogotá, Urban)
In Pakistan, the story was very different. Over the course of three days of observation at various agents’ locations in three provinces—two in Punjab and three each in Sindh and Khyber Pakhtunkhwa (KP)— our researchers observed 778 transactions, of which 324 (42 percent) were transactions in which an individual conducted a BISP-related transaction. Of these 32 transactions failed due to a variety of reasons including: problems with the card or PIN number, a shortage of cash in the agent’s shop, no balance on the card, problems with the beneficiary’s identify card, or the fact that the beneficiary was not present to conduct the transaction herself. Other than the BISP transactions there were also 229 mobile top-up transactions and 100 mobile money transactions (29 and 13 percent of the transactions respectively).
Almost 97 percent of the transactions unrelated to BISP were conducted by men and took just over two minutes to complete. Men performed just over 2/3s of the BISP-related transactions, and the average time it took for all such transactions was five minutes.
We were able to gather detailed information on 203 of the BISP transactions we observed. The information covered who came to the agents’ shop, who they were with, who conducted the transaction, what role the agent played, and whether they conducted transactions other than the BISP transaction while they were at the agent’s. Of the 203 transactions, 75 (37 percent) were conducted by women on their own. Another 73 (36 percent) were conducted by men on their own. The remaining 55 transactions were conducted by someone who went to the agent’s shop accompanied by one or more persons, and in those situations women conducted 32 of the transactions (16 percent of the total), while men conducted the other 23 (11 percent of the total).
In all cases the agent swiped the card and entered the PIN number, written on a slip of paper, given to him by the person conducting the transaction. In 100 (51 percent) of the 195 transactions completed and for which we have data, the agent handed the person conducting the transaction a receipt related to the transaction, while in the rest of the transactions no receipt was given. There was a clear pattern regarding the giving of receipts—three agents we observed gave receipts in all but 6 of the 96 transactions they conducted, while the rest of the agents did not give receipts in all but 10 of the 99 transactions they conducted.
In sum, women conducted just over half the transactions (53 percent) in a program ostensibly targeted at women. In addition, in all transactions the person actually carrying out the transaction was the agent—it was he who actually swiped the card and entered the PIN.
The gender dynamics underlying the observations we made at the agents’ shops shaped the composition of the focus groups we conducted in Pakistan. We were not able to gather focus groups with women in the areas outside Karachi and ended up with all-male focus groups there. But in Karachi we were able to conduct focus groups with women. In the discussions with men we found that they were heavily involved in picking up the payments for women in their household and they could talk extensively about the process. They also talked about how they relied on agents to conduct the transactions for them or paid a guard at an ATM to help them navigate the process, although some did report being able to use ATMs.
In the women-only groups, in Karachi, we found a different story. Women there reported going to withdraw the money themselves, often on their own or in a group of women but sometimes with a male relative. They also reported that they handled the whole transaction—they did not rely on an agent to do it for them.
“I go to the bank and enter card in the ATM machine. There an option of ‘Yes’ and ‘No’ comes. I select ‘Yes’ option.” (Karachi, Women, Group 1)
“We altogether go there and help each other in withdrawing money. Our husbands work as labor and have no time for withdrawing money. So we all go to the bank.” (Karachi, Women, Group 1)
“We go together to collect money from Benazir Income Support. Some people after watching us and ask ‘Are you going to collect Benazir Money? I will send my mother as well.'” (Karachi, Women, Group 1)
Furthermore, some of the women noted that the whole process gave them a lot of control over the money they received:
“We can get the money by ourselves. Even our husbands don’t know about it and we withdraw the money and use it.” (Karachi, Women, Group 1)
What we found in Pakistan is consistent with earlier reports on the process of picking up BISP payments in Pakistan. In 2013 consultants from the design firm Continuum conducted human-centered design research on the BISP payment system and found that women were often excluded from the process and, if they were involved in the process, faced challenges navigating the ATM because of their low levels of literacy. An Oxford Policy Management evaluation report on the BISP program using data from 2013 reported that men often conducted transactions on behalf of women. The report did also note that despite this, 64 percent of the time the money ended up in the hands of the women because the men who picked it up handed it to them.
Clearly it is possible for women beneficiaries of G2P programs to gain experience in withdrawing money from an account using a debit card or mobile phone. The experiences of women in Colombia prove this. The reports from the women in Karachi also suggest this. But the gender dynamics in Pakistan are excluding many women from having this experience. Furthermore, even if more women were involved in the process of picking up their payments, it is unclear, given the experience of a lot of their menfolk, whether they would gain full control over the process because the role the agents play.
Finally, we must end with a note of caution. Despite the fact that women in Colombia have gained facility in withdrawing their payments from ATMs and other outlets, this has not led them to become more financially included. They withdraw all their money at once, and make little or no use of the functionalities of the accounts through which the government pays them. Why this is the case is the subject of our next blog.
Image credit: World Bank
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