[MFP] CGAP Newsflash: Linking Electronic Payments and Social Cash Transfers in India

 

CGAP Newsflash: Linking Electronic Payments and Social Cash Transfers in India    The Indian state of Andhra Pradesh, home to 90 million people, has been using electronic channels to disburse social welfare payments since 2006.   In fiscal year 2012-2013 alone, the Government of Andhra Pradesh channeled  $1 billion worth of social welfare payments through electronic channels, and this figure is expected to increase. Andhra Pradesh was the first state in India to implement this electronic payment channel at scale and it continues to be a leader in improving payment delivery to very poor populations. Earlier this year, the government of India announced the direct benefit transfer scheme, an ambitious program that aims to transfer billions of dollars worth of subsidies to hundreds of millions of poor across the country through a bank accounts linked to Aadhaar, a unique ID, for every Indian.  Andhra Pradesh is also taking things one step further in their electronic system  by beginning to link linking its electronic benefit payments with Aadhaar.  From April to September 2013,  CGAP directed a research study to better understand the experience of receiving social benefits through electronic means in Andhra Pradesh, the agents who deliver these payments, and the banks who disburse funds. In addition, researchers analyzed the potential impact that a full roll-out of the Aadhaar system could have on the already largely electronic payment system of Andhra Pradesh.  The study found that improving the business case - for both banks and agents - and creating a better experience for recipients are critical to build an electronic social cash transfer system that successfully works for the poor. While there are no banking regulations that prevent the electronic payments from advancing financial inclusion, there are design elements in the program that prevent this system from offering financial services more broadly. Read the Executive Summary >> Read the blog post >> View the photo gallery >>   CGAP   You have been sent this email because you are on the CGAP emailing list. If you prefer not to receive further emails, please email us at CGAP@WorldBank.org

 

 

 

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