Using digital technologies to re-imagine cash transfers during the COVID-19 crisis

Digital Pathways publication
Abstract

As the COVID-19 pandemic unfolds, policymakers around the world are facing unprecedented pressure to rapidly provide support and assistance to the most vulnerable. This paper focuses on cash transfers — the most common form of social assistance interventions, and identifies how technologies can help rapidly deploy and scale new cash transfer programmes with the added benefit of minimising in-person contact. 

Key points:

  • The COVID-19 crisis has created a new imperative to provide economic support to the most vulnerable people around the world. The novel virus has surfaced equally novel ways to think about how cash transfer systems can be rapidly expanded to reach people not covered by formal registries or financial systems; often harnessing new approaches afforded by digital technology.
  • Governments can compensate for poor coverage of official social registries, using community leaders’ lists of beneficiaries, banks’ lists of existing clients, MNOs’ lists of subscribers, or gig economy platforms’ lists of employees.
  • The people that most need support are often the same people who are not connected to existing financial infrastructure. Governments should expand the coverage of social assistance by distributing payments through alternative financial networks (such as mobile money) or by engaging established community structures.
  • Where countries do not have the enabling regulatory environment for digital transactions, this should be prioritised in conjunction with appropriate short- and long-term regulatory safeguards.
  • A coordinated strategy is needed for gaining the consent of new beneficiaries and communicating new mechanisms to access cash transfers—especially for individuals previously excluded from the social safety net.