Digitising cash transfer programmes for integrated social protection

Apart from cash transfer to the poor and extreme poor, the government also supports vulnerable people through immediate relief and cash transfer programmes during emergencies like floods, cyclones and earthquakes. 

Now there is a new emergency; the coronavirus is raging on unabated, pushing the poor into the extreme poor territory, and leading many others to be enlisted as the "new poor." So, for integrated social protection, focusing on transparent digital cash transfer programmes has been a crying need to help the downtrodden. 

Currently, cash transfer programmes are used to disburse old age allowance, allowance for widows, destitute and deserted women, and allowance for the financially insolvent disabled. The beneficiaries of old age allowance, 62 years and older for women and 65 years and older for men, are paid Tk500 per month. Widows, destitute and deserted women are also paid the same, while the allowance for insolvent persons with disabilities is Tk700 per month. 

It is noteworthy that the number of beneficiaries is rising gradually; the government is working relentlessly to free the country from poverty and hunger as per the directives of Prime Minister Sheikh Hasina.

Considering the devastation brought on by Covid-19, the government has given more emphasis to the allocation for social safety net programmes in the budget for the 2020-21 fiscal year, allocating Tk95,574 crore for to the sector. This is 16.83 percent of the total budget and 3.01 percent of the GDP. Some Tk739 crore more has been allocated for the aforementioned three cash transfer programmes.

But it is time to ponder over how effective these programmes really are.

Different studies demonstrate that the traditional approaches to cash transfer programmes are mired in the cocoon of misappropriation, incoordination and operational inefficiencies of the local representatives and others related to these projects. Studies also found nepotism and indifference while selecting the most deserving beneficiaries, hindering the process of proper disbursement of government aid.

On top of that, according to a survey by the Bangladesh Bureau of Statistics (BBS), 71 percent of the deserving people remained outside the social safety net and 47 percent of those included in the net were not entitled to the assistance. 

The most recent example of misappropriation published in the dailies shows that the chairman of Chaprashir Hat Union Parishad in Noakhali was skimming Tk500 from each of the newly selected beneficiaries by convincing them that this amount would be needed to open bank accounts. Those unwilling to pay were being threatened with exclusion from the beneficiary list. 

In most union parishads across the country, all beneficiaries of any government social security cash transfer programme congregate at one specific bank, leaving little room to maintain social distance amid this pandemic. This raises chances of being infected. Besides, many beneficiaries are too weak to appear in person at the bank. 

In this era of digitisation, mobile financial services (MFS) can be used as the quickest means of cash transfer among the beneficiaries. It also has very little scope for misappropriation. Mobile financial services are dealing with nearly 80 million registered accounts.  

Experts have emphasised the need to ensure that digital cash transfer programmes not only be cost and time effective, but that they also help the government to select the right people – the most deserving and vulnerable in the communities. At present, this is hard to accomplish by following the traditional approach. 

A recent study conducted by pi STRATEGY and Access to Information (a2i) demonstrated that digitisation of cash transfer programmes can save $15 million per year in costs for the government. It can alo save 91 million hours, $20 million, and 60.4 million visits per year for the beneficiaries.

Government-to-person (G2P) is the method of electronically transferring money directly into the accounts of individuals. These also eliminate the need to travel to banks and bear the extra cost of middleman, one expert stated. 

However, the National Social Security Strategy (adopted in 2015) called for a national household database to identify the poorest and vulnerable population groups. In this regard, the Department of Social Services is working to prepare a central database to identify the real number of extreme poor under the social safety net programmes.

It is expected that a new model will be developed very soon and social services provided to the poor and ultra-poor people in the country must be digitised to free the country from the clutches of poverty. 

The author teaches at Prime University and can be reached at malaulalam@gmail.com