The last mile

Published January 8, 2021
The writer is a financial inclusion researcher.
The writer is a financial inclusion researcher.

HOMEBOUND and out of work, and then waiting to hear from the government about an unseen enemy, the poor in this country battled the all-too-familiar risks of hunger and deprivation in 2020. If nothing else, the Covid-19 pandemic brought to the fore the stark inequality that has always existed in Pakistani society.

The biggest safety net programme launched in the country’s history, the Ehsaas Emergency Cash Programme, served and perhaps saved 16.9 million people. The programme, which has been widely lauded, has also been discussed in depth in the Ehsaas Emergency Cash Report (October 2020) released by the Poverty Alleviation and Social Safety Division (PASSD) and the UK-based Delivery Associates’ report (November 2020), which was launched with much fanfare.

Perusing these reports and the many self-congratulatory press releases issued by the PASSD, what stands out is the absence of the State Bank, more specifically the National Financial Inclusion Strategy Secretariat, whose immediate task in such times was to advise the government on the use of digital financial services. In the PASSD report, Dr Sania Nishtar’s exasperation at the sheer magnitude of the programme’s rollout is palpable; she relays the hit-the-ground-running kind of grasp of technicalities that was asked of her. Indeed, designing a social protection programme is the core function of the PASSD, while the delivery of the cash transfers to its intended recipients required the expertise of the NFIS Secretariat. It appears that the PASSD was not aware that the NFIS Secretariat ought to have been the delivery arm of the programme. This abdication of responsibility led to a weak delivery set-up that impacted the beneficiaries.

In Multan during the initial rollout in April, a woman was trampled to death in a stampede at one of the Ehsaas campsites where cash distribution was taking place. Along with many others, a desperately poor woman, Naziraan Bibi, clamoured at the doors of the campsite as the highly infectious coronavirus raged on.

Failing to incorporate branchless banking is negating much of the efforts for financial inclusion.

There has been a decade’s worth of achievements in the digital financial services/branchless banking (BB) sector in Pakistan. The most important component of the NFIS and this sector is the vast network of the BB agents (also referred to as ‘the last mile’) who are primarily shopkeepers or retail outlet owners. Armed with a wireless biometric verification device, these agents process millions worth of bill payments, inland remittances and BISP-related cash withdrawals.

Repeatedly, this robust infrastructure has been reduced to ‘touts’ by the PASSD and, oddly enough, the same term is also used by Delivery Associates, who in their report ironically do not focus much on the delivery component of the emergency cash programme.

Two banks with BB licences and their BB agents were used for the cash transfers. In such times, every BB service provider should have been engaged; the entire network of over 400,000 shopkeepers spread all over the country could have been used for cash disbursements. Even if only 50 per cent of them are active, there were 200,000 that could have stepped up and earned commissions. After all, the one same dukaanwala has multiple devices of different BB brands (ie, non-exclusivity). At the backend of these biometric devices is the Nadra verification system. Additionally, the Pakistan Postal Service has 13,000 post offices and has been used earlier for BISP disbursement; those special campsites were not needed.

Last year, the SBP ordered all banks to biometrically verify the records of every account holder. For many of the elderly, bank staff visited their homes carrying the small portable device along with a mobile phone, tablet or laptop to capture their fingerprints, and the same Nadra system at its backend. Why was this mechanism not employed to deliver the emergency cash to persons with disabilities and the elderly who were/are at the most risk of dying from Covid-19?

The Ehsaas cash transfers are done through the banks by opening a limited-mandated account; this has been the practice for BISP too. The limited-mandate accounts allow only cash withdrawals and shut down within six months. It is now deeply ingrained in the psyche of BISP/Ehsaas beneficiaries that any money from the government needs to be withdrawn immediately and in full. This negates all the efforts that are made for financial inclusion.

A regular mobile wallet offered by BB providers could easily be used for government-to-persons cash transfers. At the Karachi Literature Festival in March, Minister for Planning and Development Asad Umar remarked in a women’s empowerment session that the NFIS headline target of 20m women bank accounts (and mobile wallet) holders by year 2023 was too low. The emergency cash programme was the opportunity to achieve that target.

In India, under the Pradhan Mantri Jan Dhan Yojana programme, a bank account was digitally opened for every person in the Aadhaar ID system. This could have been emulated here for persons with disabilities who have a special CNIC and are now entitled to receive a stipend under Ehsaas.

The need for special campsites was for those who do not have a CNIC and are surely the poorest of the poor; they could have finally been brought into the national database. In Karachi’s Machchar Colony, no cash transfer or ration from the government reached the sizeable population of stateless undocumented people who reside there. Had the PASSD not been burdened with the delivery mechanism of the safety net, the good doctor may have just tried to figure out a way to reach out to the poor who have been systemically socially excluded and continue to be so.

Objects in the rear-view mirror are closer than what we might want to believe. The 70-year-old Naziraan could have lived knowing that her Rs12,000 was safe in a mobile wallet opened against her CNIC and that she could withdraw her money whenever it was convenient for her from the nearest BB dukaanwala. If only.

The writer is a financial inclusion researcher.

Published in Dawn, January 8th, 2021

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