Digital Bangladesh – Taking the G2P (Government to People) Public Services at the Doorsteps of Poor and Vulnerable

The newly piloted ‘MIS Integrated G2P Payment System’ benefit from four sides and is a Win-Win Situation for all stakeholders. It allows poor and vulnerable Beneficiaries to withdraw money at their own choice in terms of mode (Bank, Mobile Money,  Post Office etc.), location (Village, Union), quantum and time that is convenient to them at a zero cash-out charges. It also benefits the Exchequer as the money is withdrawn from the Treasury only when it is due to be paid and not left idle for even one day. For the Line Ministries that are engaged in implementing safety net programs, it strengthens information system and prevents leakages as it require National Id (NID) verification at registration and NID validation before payment cycle is executed to prevent leakages in terms of double dipping and duplicate beneficiaries. It also foster financial inclusion in the country in a big way since millions of poor and vulnerable beneficiaries shall be brought under the purview of low cost and conveniently located financial services.

Hon. Finance Minster Bangladesh Rolling Out G2P for Maternity Allowance Program
Also seen is the State Minister for Women and Children Affairs, Bangladesh

Story of Munni Bai: Munni Bai (name changed), aged 26, a pregnant woman in a remote village at Tungipara Upazila (sub district) in Bangladesh had to cross two rivers and travel almost 20 kms to reach to the nearest branch of Sonali Bank located at the sub district headquarter to collect her BDT 3000 (USD 36.oo) on a six monthly basis, provided by the Government of Bangladesh. Due to her precarious physical condition she had to be accompanied by her husband or brother who too had to forgo that day’s wages and incur further cost on travel. Effectively, the cost to collect BDT 3000.oo turned out to them exorbitantly high at nearly BDT 750.oo ie 25%. The inconvenience was higher, when the dates to collect the money were specified and limited and had a very short window of three days. She had little choice to collect it. And imagine, if she was sick during these three days, the other window to collect the money was an enigma for her and the family.

Munni Bai like many other half a million poor women, is the recipient of the ‘Maternity Allowance for Poor Women’, a social safety net program of the Ministry of Women and Children Affairs (MoWCA) of the Government of Bangladesh that offers a monthly allowance BDT 500.oo (USD 6.oo) to the poor women with the objective of providing financial assistance to poor pregnant women in rural Bangladesh in order to improve health and nutritional condition of both the mother and the baby. Ideally, she should be receiving BDT 500.oo on a monthly basis in order to provide herself and her baby a healthy nutrition. However, she receives the same at a lag of 6 - 8 months and that too when she receives the amount, it is paid as lumpsum (BDT 3000.oo) after 6 months. The lumpsum money usually got invested into buying an asset or helping her husband in expanding his business, or for buying agricultural inputs, thus completely defeating the purpose (Health & Nutrition) for which it was delivered.

When spoken to her, Munni Bai showed her keen desire to opt for a more convenient location, frequency and mode of payment that was available in her own village within a stone’s throw distance rather than at the Upazila Hq. The Post Office or the mobile financial service (MFS) providers such as bKash and / or Rocket were always there in the vicinity. However, she knew that things couldn’t turnout the way she wanted them to be and hence it remained a dream for her to withdraw her own money at her own convenient time on a regular monthly basis without traveling and being accompanied by someone else.

Government Side: Interestingly, the Ministry of Finance which provides the Budget to the MoWCA line ministry for delivering these cash benefits also grappled with the multiple challenges such as inefficiency in its cash management for safety net programs. The concerned line ministry such as MoWCA used to withdraw money from the exchequer (Finance) and deposit the same in a non-interest bearing account of the scheme with various banks. In many cases, the money was unnecessarily withdrawn and remained unutilized for more than 6 months. Hence while the Finance was deprived of the funds for that period, even the beneficiaries couldn’t get the same since the processes involved were inefficient. Moreover, even the MoWCA was not sure if the beneficiaries that they are paying to were also being benefitted by some other scheme of their own department or even the other ministry. For, the data of one program never used to talk to the data of the other and the beneficiaries were never recognized by a single and unique identity number.

The New MIS Integrated G2P Payment System: The new G2P Payment System, designed, developed and piloted last week by our project ‘Strengthening Public Financial Management for Social Protection’ (SPFMSP), funded by the UK’s DFID and Australia’s DFAT and managed by Maxwell Stamp Plc. UK, was rolled out by the Government for MA scheme in 7 Upazilas. The system that harnesses many of the existing pieces and institutions is committed to serve the people at the lowest economic strata and offer them benefits of the social safety net programs to reach at their doorsteps. Beneficiaries of the MA Program, who are largely vulnerable women are now empowered to take informed decision about their choice of mode of payment viz.  Bank, Mobile Money or Post Office whichever is convenient to them and are now entitle to receive the money on a monthly basis rather than after a gap of 6 – 8 months.

Comparative Systems

Stakeholders	Old Prevailing System	New MIS Integrated G2P Payment System
Beneficiaries	No Choice to Collect Money in terms of Time Locations and Cost (TLC). Had to travel long distances on a specified date and withdraw full amount. Spend Time and Money on Travel and Wage Lost. Money received after a lag of 6 – 8 months	Choice to Collect Money from any convenient location, time and quantum. Money delivered at doorsteps in own village. No cash out charges and costs involved. Money to be received on Monthly basis with No Lag.
Exchequer (Finance Ministry)	Money withdrawn by Departments well ahead of time and kept in Bank accounts of Scheme at all districts and Upazila bank accounts. No planning for cash flows. Treasury Non-Compliant	Money withdrawn from Treasury only when it is due to be paid to the Beneficiaries. No intermittent bank accounts and no unutilized money laying idle. Treasury Compliant with planned cash flow management preventing external borrowings
Line Ministries of Social Protection	Weak or no Information Systems. Processes liable to Inclusion Errors and Leakages with no data verifications and no scope of data validations with other schemes leading to possibility of ghost beneficiaries, duplicates etc.	One Time NID Verification of Beneficiaries at Registration and NID Validation with different programs before payment is effected. System to identify ineligibility,   double dipping, ghost and duplicate beneficiaries and prevent leakages.
Financial System and Inclusion	Limited Localized Ledger oriented bank accounts with zero transactions and services. Only for withdrawal of safety net benefits	Full Financial Inclusion in terms of holding Individual Accounts in Core Banking in Banks and / or Mobile Financial Services with scope for all other financial services open. Financial and mobile operational literacy imparted

The new system is also compliant with the Treasury Rules and permit withdrawal of money from the Exchequer ‘Just in Time’ and only when the money is required to be transferred to the beneficiaries. This also allows the Finance Ministry to control and accurately forecast their cash out flows in terms of USD 6.5 Billion (2017 – 18 budget for social safety net programs) and prevent any unnecessary advance withdrawals from the Treasury and floats being enjoyed by the banks for months together. The MIS processes also verifies each beneficiary using their NIDs with the Election Commission NID Server as so to prevent registration of any ghost beneficiaries. The system also provides a repository of each beneficiaries' NID that form part of one or the other safety net program in Bangladesh. This allows the system to cross validate the NID database for each of the beneficiary and identifies if they are already taking benefits under any other scheme and thus prevents leakages in terms of double dipping and duplicates. For age specified schemes such as Maternity Allowance (19 - 35 years), Old Age Allowance (62 years) it also prevents registration of under-aged or over-aged beneficiaries 

Convenience at Doorsteps: Women like Munni Bai, who had to travel miles together with a companion to the Bank branch at the Upazila Headquarter on a specified date to collect their allowances and shell out heavy cost in terms of travel and opportunity will be benefited tremendously. Collecting money at their convenient time and location within the village, through a choice of mode (Mobile etc) and amount is like a dream come true for them. Prompt and Just in Time Delivery of Public Services in a Simplified and Transparent manner at lowest possible cost to the Beneficiary has now been developed and successfully piloted.

Camps Organized at Villages to Open Accounts for Mobile Financial Services and Impart Mobile Financial Literacy 

Way Forward: The Government of Bangladesh has to now reckon the biggest challenge of accurately digitizing the database of beneficiaries of all including capturing their NIDs and Payment Choices for receiving benefits. Other social safety net programmes such as Old Age Allowances, Widows and Disability Allowances programs are already in the process of digitization. For all programs just as in case of the piloted MA program, there is also a need to expand the digitization to all safety net programs throughout the length and breadth of Bangladesh. However, With a Well Begun, its already Half Done.