On the 3rd of August 2022, LightCastle Partners and James P Grant School of Public Health, BRAC University facilitated a Strategic Consultation Workshop jointly hosted by the Department of Women Affairs (DWA) and World Food Programme (WFP). The workshop showcased the possible roadmap and recommendations for designing the Vulnerable Women Benefit Programme (VWBP) integrated with digital financial inclusion interventions, which will provide support to 1 million beneficiaries from January 2023 and result in women economic empowerment.
Funded by the Bill and Melinda Gates Foundation, and in association with the Ministry of Women and Children Affairs (MoWCA), WFP’s year-long project aimed to understand the relationship between the rise of digital financial services/products in Bangladesh and women’s economic empowerment for vulnerable women.
The consortium, led by LightCastle Partners, conducted the study in two phases. In the first phase, the consortium partners comprehended the existing state of digital financial inclusion, vulnerable women group’s interest, and their ability to leverage DFS, including the potential challenges and opportunities. Based on the recommendations from Phase I, the second phase of the project will focus on implementing the findings from the first phase. The overall aim of the consortium will be to strengthen women’s economic empowerment through digital financial products/services.
At the event, the respected Secretary of the Ministry of Women & Children Affairs (MoWCA) was present as the Chief Guest and the representative from the Office of the Country Director, WFP and the Director General of DWA were present as the Guest of Honor and Session Chair.
Representatives from different government ministries: Ministry of Disaster Management and Relief (MoDMR), Cabinet Division, Economic Relations Divisions, Microcredit Regulatory Authority (MRA), Bangladesh Bank, private sector partners: MFS, Banks, technology organizations, NGOs, and donor organizations also graced the session.
Demonstration of the recommendations finalized from research efforts and a validation workshop (the event took place on the 25th of July with 15+ stakeholder organizations) was a key segment of the Strategic Consultation Session. The consortium partners took an integrated approach and suggested three key recommendations.
Three Model Recommendations: promoting social acceptance, helping in digital operations, and bringing in specialized products
The first recommendation emphasized awareness and sensitization of beneficiaries and their family members to promote women’s participation in economic activities and decision-making. This will help ensure the engagement of women in financial inclusion activities and will help empower women against social barriers such as restricted mobility, cultural norms, low control over family finances, etc. Potential partners to facilitate this intervention could be NGOs and Microfinance Institutions. Side by side, Financial Institutions, and MFS service providers can also help in designing financial literacy curricula for the beneficiaries.
The second recommendation stressed building the digital financial capacity through an Integrated Support System which will help equip vulnerable women with the necessary knowledge and technical assistance to access and utilize Digital Financial Services. The intervention focused on teachable moments around Digital Financial Services (DFS) and Social Safety Allowance Programmes (SSNPs), which help strengthen the capacity of vulnerable women at the grassroots level. Through advocacy workshops and training of the trainers (Agents) on how to handle vulnerable women queries and demonstrate solutions/steps. Potential partners suggested for this intervention are Mobile Network Operators, Financial Institutions, MFS providers, and others.
The final recommendation focused on the design of digital financial products with the needs of vulnerable women in mind in order to facilitate access, adoption, and repeat usage since vulnerable women groups have low digital literacy, and requires specialized products thus, there is low organic adoption of financial services. To address these challenges and facilitate the intervention potential stakeholders among others could be government stakeholders, Financial Institutions, and Mobile Financial Services.
After the recommendations and relevant case studies have been showcased, the floor was opened up for the invited guests and participants of the event to add their knowledge and clarify the possible way forward. Here, the key takeaways are presented in snippets.
Right now, more than 10 million beneficiaries are receiving their benefit allowances through mobile financial services. However, this might not be a picture of empowerment or technology adoption. Practically the beneficiaries are getting money into their account, but they might not be in charge of what to do with the money as there are barriers to control. These kinds of barriers is usually exerted by male members. Even when the beneficiaries are getting the money by themselves, they are often unaware of what to do with the money. It was mentioned that all the G2P payments end up being mere cash-outs. Since transactional use of these mobile financial services accounts was non-existent, there should be a push towards using the MFS accounts actively in terms of utilizing different financial services and transacting as required.
A similar concern was raised by the cabinet division, and it was mentioned that the two stages of service delivery should be strictly maintained. The first one is the delivery of resources (cash allowances) directly to the beneficiary account; the second one is the utilization of the resources actively by the beneficiary.
Through automation of the allowance disbursement process with mobile financial services; the first step has been achieved broadly. Currently, it can be identified and secured whether the beneficiary account is receiving money or not. However, there needs to be work done on the second stage which is the control of money and usage of different services.
The Micro Credit Regulatory Authority (MRA), pointed out this facet of digital financial inclusion. According to the authority’s representative, 741 non-government organizations are licensed under the jurisdiction of the MRA and currently, these microfinance institutions are working for 35 million people. She also mentioned that for the past 5 decades these organizations are actively pushed for financial inclusion through microfinance activities. Currently, the web of NGO network sufficiently provide coverage for anyone who needs it.
However, digital literacy is nonexistent among vulnerable communities. So, MRA as rightfully pointed out focuses on digital literacy to further utilize the existing financial inclusion efforts. The recent trend among microfinance institutions is to conduct pilot studies for digital financial inclusion. There are products in exploration related to lending, insurance, savings, and stipend. However, the cost burden from these pilot studies usually falls on the service recipients. The authority has strict directives to not put the cost burden on the recipients.
Microcredit regulatory authority is also working to provide a one-stop service for digital financial inclusion which is currently in a preliminary study phase. The authority also curates the database of all the microfinance service recipients. The authority looks forward to utilizing its existing resources and future plans to promote digital financial inclusion among vulnerable women groups.
The government ministries working closely with vulnerable women pointed out that the inherent cost of being active in the digital financial ecosystem is a burden for the vulnerable woman. For example, to access any digital financial service one must possess a mobile phone, and for advanced services a smartphone. Connection to the Internet and active cellular connection also costs regularly.
When someone uses mobile financial services and needs a cash-out on regular basis, the person needs to take into account the cost associated with cash-out. For different banking services, there are associated costs or charges. While designing a vulnerable woman benefit programme, these costs and burdens should be considered. Moreover, woman should be given incentives and offers to make digital financial services lucrative comparatively.
Similarly, the officials working with other benefit programmes voiced their concern about having a generalized view of different recommendations. Although the study findings were validated and triangulated to find out the best possible solutions, it should be kept in mind that in every community, region, or locality the specific barriers and enablers change. In some contexts, the local leaders may be highly accommodative or in some places, the NGOs might not have access to the right curriculum. Similarly, a lot of complexities and variations may arise while implementing a recommendation. Hence, it is necessary to take care of these local contexts and work around them to provide empowerment related interventions.
The representatives of Bank Asia, a bank with wide agent banking coverage, voiced their support for agent banking led solutions instead of depending solely on MFSPs. Currently, the agent banking infrastructure includes over 14,000 agents and almost 20,000 agent outlets. At the same time, the modality of micro merchants is being explored. While using agent banking, the vulnerable woman group would not require any kind of mobile phone or technical details to access services. Customers can simply use their fingerprints to access their accounts and services. The micro merchant model can provide ‘last mile’ coverage as it is essentially outsourcing the banking service delivery through independent contractors. Hence, the necessity of literacy requirements can be avoided. Agent banking is also perceived to be more reliable to vulnerable communities. For some particular services, agent banking costs less than mobile financial services.
The representatives from mobile financial service providers mentioned the efforts they put in to sensitize their customer base towards digital financial inclusion. Since the beginning in the early 2010s, mobile financial service providers provided the basic knowledge to operate mobile financial services to their customers at the point of registration. For doing so, they utilized their wide agent network. It is mandated that agents provide all the necessary information and demonstrations to any customer at the time of registration or service delivery if required.
However, the ground reality and the scale of impact among vulnerable women group need to be assessed with a different lens. From the findings of this study, it was seen that vulnerable women have been subjected to fraud and additional charges for receiving services. Although beneficiaries rely on the agents, it was seen at the ground level that agents perform the tasks for beneficiaries rather than demonstrating and imparting technical knowledge to the beneficiaries. Hence it is safe to say that there is a mismatch between what the mobile financial service providers are focusing on and the impact it’s creating among vulnerable communities. Coordination and open communication through a coordinating body facilitating a clearer understanding of both supply and demand sides can make the existing efforts more efficient and impactful.
Mr. Md Hasanuzzaman Kallol, secretary of the Ministry of Women and Children Affairs, stated, “To raise our GDP, we want to encourage more women’s participation in economic activities. For them, the standard swing is insufficient. Hence, to increase their standard of living, we must engage women groups in innovative sectors such as agriculture and food processing.” this shows the priority that is being given by the ministry to vulnerable woman group.
The secretary firstly thanked everyone and reflected on the importance of such initiatives by the World Food Programme. He also pointed out how the ministry is continuously collaborating with different organizations for women’s digital financial inclusion. Regarding the project at hand, the secretary pointed out the following issues to be explored further:
Representatives from WFP praised Government of Bangladesh’s efforts and recent achievements and highlighted on the actions they have taken and currently on going. They also mentioned the timeliness of such design defining studies and urged the different partners and stakeholders to come up with solutions to take the vulnerable women one step further in their journey to financial inclusion by breaking away restrictive social norms, building operational capabilities and providing innovative products incorporated with income generating activities.
Stakeholders from private sectors such as bKash, Bank Asia and many others financial institutions applauded the study findings and expressed to work in line for the marginalized women groups.
Finally, Ms. Farida Pervin, DG of DWA concluded by briefly shedding light on some findings, future plan and steps for DWA and urging everyone to come together to live up to the challenge of vulnerable women’s empowerment.
The consultation workshop has been instrumental in kick starting a dialogue among the government bodies, development agencies and private organizations. The various suggestions and cooperative potential commitments among these entities would ultimately help in implementing the interventions, which will be taking effect from the beginning of 2023.
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