March 1, 2017, was a milestone in the story of financial inclusion in Bangladesh. On that day, 10 million low-income mothers received their first digital payment from Mayer Hashi (Mother Smile), a long-standing government-run program that offers financial aid to the parents of primary school students.
There are many good reasons for countries to digitize government-to-person (G2P) payments. Digital transactions are more transparent and traceable than cash-based ones, and also faster. But there are just as many challenges. In some countries, too few recipients may be enrolled in a mobile money service to support a switch to digital delivery. In others, a lack of mobile money agents may make it too difficult for recipients to convert digital payments into cash, rendering the payments useless. The government departments involved in a payments program may also be unwilling or lack the skills to support a transition away from cash.
In Bangladesh, several leaders in government and the private sector spearheaded Mayer Hashi’s digitization initiative, which likely gained cooperation from some who may have otherwise not supported the effort. This approach may be applicable in other countries.
Rolling out digital payments also required the support of mobile money agents and teachers. The program needed 400,000 primary school teachers to identify low-income mothers who qualified for financial assistance, help program applicants fill out know-your-customer forms and open linked bank accounts and assist with disbursement paperwork. These teachers mailed hard copies of recipient lists to SureCash, which digitized the data and sent them back to the teachers for verification. This process reduced the error rate to 5 percent. SureCash rewarded teachers with a small fee for each record correctly entered into the database of eligible recipients.
Agents were another crucial partner. SureCash raised commissions and offered agents a subsidy for an initial period to ensure agents’ support even during the ramp-up phase.
SureCash had to handle more than 10 million account application forms in just a few months. It imported 45 high-speed scanners capable of processing 60 pages per minute and set up a form processing center staffed by up to 240 people in peak periods. It also upgraded its character recognition software to a custom solution that not only recognized the text in scanned documents, but also color-coded its level of confidence in the scans to flag problematic areas, speeding up human validation.
[Consultative Group to Assist the Poor]