Project: Impact of Digital Social Protection Programs and Financial Inclusion

Over the past decade, the Financial Services for the Poor (FSP) team at the Bill & Melinda Gates Foundation (BMGF) has been supporting the digitization of social protection programs as an entry point for increasing the financial inclusion of the unbanked. Underlying this programming was the hypothesis that digitized Government to Person (G2P) payment streams would lead to:

• Financial inclusion and women’s economic empowerment, 
• Increased interest by Financial Service Providers in serving this group of clients and
• Pro-financial inclusion regulatory response by governments.

The FSP team contracted Limestone Analytics to take stock of the current evidence on the links between G2P programs, Digital Financial Services, and financial inclusion, and to surface lessons learned on programming in this space. This stocktaking:
1) Evaluated the extent to which the initial hypotheses that digitized G2P leads to access and inclusion for the unbanked and appropriate market and regulatory responses has proven true;
2) Surfaced proven insights on where FSP’s engagement has proven impactful (or not), and;
3) Provided recommendations on how FSP should best engage and focus its investments on G2P for the next decade.

Limestone used a mixed-methods approach to take stock of progress against these goals, including a combination of qualitative and quantitative data from key informant interviews, program documents, country strategies and academic and grey literature. The study included more than 40 KIIs of key stakeholders ranging from government officials to thought leaders, including BMGF staff. The project also included a text mining and machine learning review of 124 World Bank Project Appraisal Documents (PADs) to determine if financial inclusion objectives had been factored into their programming. As part of the review, six country case studies were developed: Bangladesh, India, Indonesia, Kenya, Nigeria and Pakistan. 

The research found that the Gates Foundation has played an important role in leveraging digitized G2P programs to advance financial inclusion and that it has improved access to financial services for women. However, there is more work to do to increase usage and encourage an effective market and regulatory response.