MICROFINANCE PAPER WRAP-UP: “The Future of Government-to-Person (G2P) Payments: Three Years of Learning About G2P Choice in Zambia;” by Silvia Baur-Yazbeck et al; Published by CGAP, World Bank Group

The authors of this paper evaluated the methods that Zambia’s Ministry of Community Development and Social Services (MCDSS) uses to issue government-to-person (G2P) payments via its Supporting Women’s Lives (SWL) and Girls Education and Women’s Empowerment and Livelihoods (GEWEL) projects. Launched in 2017, the G2P program provides very low-income women in rural areas with mobile phones, two digital transfers totaling ZMW 2,500 (USD 167), and business and life skills training. The payments are unusual in that they are delivered through a range of payment intermediaries. Recipients use an online portal to choose their preferred provider from a group of participating commercial banks; mobile money providers; the nation’s postal service; and NatSave, a government-owned non-bank financial institution.

The authors’ findings include the following:

(1) “Implementing choice into a G2P program takes time, effort and continued training of recipients and program staff.” MCDSS had to make several adjustments after rolling out the program, such as revising recipient and staff training curricula and expanding access by building partnerships with financial services providers that were entering the market for the first time.

(2) “Choice-based G2P payments benefit recipients, government programs and the market ecosystem.” Beneficiaries have more convenient access to the program because of their ability to choose among service providers, for example by selecting providers with service points closer to their homes. The program also includes financial management and business skill training. Recipients in very remote areas can access the G2P services via mobile money providers. MCDSS also benefits by using multiple providers. One example was when a provider lost its license in 2019, the program was minimally impacted because it already was working with several other providers. The program also encourages more financial service providers to enter the market, increasing competition, which can lead to benefits such as expanded service in rural areas and improved customer service.

(3) “Provision of phones and choice-based payments positively impacted women’s decision-making and control.” The mobile phones and grant funds were found to be highly beneficial, providing women with a higher degree of control over their businesses – due to improved communication with customers and suppliers – as well as increasing women’s participation in household financial decision-making.

(4) “The success of the GEWEL project has encouraged other G2P programs to introduce choice.” MCDSS is replicating the choice-based G2P payment model in the country’s Social Cash Transfer (SCT) program, transitioning from manual, standardized periodic payments to digital, choice-based payments for 616,000 households.

The authors concluded that the project demonstrates choice-based G2P payments benefit the local financial ecosystem as well as providing recipients with flexibility and choice that “improves women’s self-determination and reduces their vulnerability.” The project has attracted more financial service providers over time and enabled access for ultra-poor women. However, the study also found the implementation of the system was challenging. It required long-term investments by the government in staff training and rolling out the program, particularly to reach customers in areas with minimal financial access points and mobile phone service.

This is a summary of a case study by Silvia Baur-Yazbeck, Emma Wadie Hobson and Mutale Chimba; published by CGAP (Consultative Group to Assist the Poor) and the World Bank Group; April 2021; 12 pages; available at https://www.findevgateway.org/sites/default/files/publications/2021/Disclaimer_The-Future-of-G2P-Payments-Zambia.pdf

By Sophie Fiala, Research Associate

Sources and Additional Resources

World Bank press release on GEWEL
https://www.worldbank.org/en/news/loans-credits/2020/03/27/zambia-girls-education-and-womens-empowerment-and-livelihood-gewel-additional-financing

World Bank article on SWL
https://blogs.worldbank.org/africacan/more-than-a-short-term-escape-sustainable-empowerment-solutions-for-girls-and-women-in-zambia

International Policy Centre brief on Zambia’s SCT program
https://ipcig.org/pub/eng/PRB62_A_brief_history_of_Zambia_s_social_cash_transfer_programme.pdf

Did you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find more at https://www.microcapital.org/products-page/.