MSC concluded a workshop in Delhi on 4th March, 2020 in collaboration with NITI Aayog and the Bill & Melinda Gates Foundation. The workshop, titled “Enhancing women’s economic empowerment through financial health—Insights from NITI Aayog’s transformation of aspirational districts” saw participation from financial inclusion experts, policymakers, and regulators across industries. The participants deliberated on policy and product recommendations that the government and financial services industry can adopt as it works towards greater financial health of women.
The event started with the keynote from Ms. Sarah Willis of the MetLife Foundation, where she spoke on setting the context on women’s financial health. This was followed by the inaugural address by Ms. Archana Vyas of THE Bill and Melinda Gates Foundation, India, and the keynote address by Ms. Alka Upadhyaya, Additional Secretary at the Ministry of Rural Development.
A panel of experts also discussed issues around women’s financial health for impactful women’s economic empowerment. The panelists included Mr. Anjani Singh of the Bill & Melinda Gates Foundation, Humaira Islam of Shakti Foundation Bangladesh, Ms. Jayshree Vyas of SEWA Bank, Ms. Manisha Sinha of India Post, and Ms. Varnali Deka, District Collector, Goalpara. The media across the country picked up various insights from the event conducted. Click through the links below to read a few mentions in the media.
The workshop will reflect on the achievements of PMUY over the past few years and highlight key lessons from the scheme with respect to policy design, targeting, coordination, implementation, and monitoring. It will also explore the impact of PMUY on gender, environment, and the health status of women and poor households. The workshop will commence with a keynote address from Shri. Dharmendra Pradhan, the Hon’ble Minister of Petroleum and Natural Gas. It will bring together various policymakers, senior officials of oil marketing companies (OMCs), sector experts, policy analysts, LPG dealers, and beneficiaries of the PMUY scheme.
Pradhan Mantri Ujjwala Yojana (PMUY) was launched in May, 2016 with an objective to provide clean cooking fuel to poor households through LPG connections. PMUY set an ambitious target to reach 8 crore poor households by March, 2020. The scheme, however, reached this milestone seven months ahead of its schedule.
PMUY is a grand success story that has accelerated India’s progress in attaining the sustainable development goals—SDG 3: Good Health and well-being, SDG 5: Gender equality, and SDG 7: Affordable and clean energy. Ujjwala has replaced polluting firewood with clean fuel and provides new LPG connections in the name of adult women from poor households. This is a study in the empowerment of women and in providing a healthy indoor environment.
MSC conducts a successful workshop on the achievements of Pradhan Mantri Ujjwala Yojana (PMUY)
New Delhi, 06th March, 2020: MSC (MicroSave Consulting) organized a workshop on the achievements of Pradhan Mantri Ujjwala Yojana (PMUY). Shri. Dharmendra Pradhan, the Minister of Petroleum and Natural Gas, attended the workshop along with several beneficiaries of the Ujjwala program, delegates from oil and gas supplier agencies, health professionals, regulators, and policymakers.
The Pradhan Mantri Ujjwala Yojana (PMUY) was launched in May, 2016 to provide clean cooking fuel through LPG connections to women in rural households. The program has benefitted 97.4% of the beneficiary households in the last five years. PMUY set a target to reach 8 crore households by 31 March, 2020 but the government has managed to achieve this objective seven months before the deadline.
While congratulating all women beneficiaries of PMUY on this achievement, Shri. Dharmendra Pradhan said, “I consider myself fortunate to be a part of this initiative and would like to thank the 8 crore women who believed in us and trusted us. I would urge all women beneficiaries to use LPG cylinders for cooking purposes and refrain from using polluting fuels to reduce exposure to harmful smoke and maintain a healthy lifestyle. Smoke can also cause irreversible damage to the fetus, which has a high social and financial cost to the family and society.”
Speaking at the session, Graham Wright, the Group Managing Director of MSC said: “PMUY has made an extraordinary achievement by reaching 80 million households that now have access to significant forms of cooking.” He added: “PMUY has differentiated itself from other DBT programs through precise targeting, faster implementation, and redistribution of savings that involved the elimination of duplicates and the “Give it Up” campaign. These integrated efforts have led to an estimated savings of USD 9 billion to the exchequer. As a result, many other countries are learning from and adopting PMUY’s model of LPG subsidy.”
The discussions at the workshop’s first panel on the “Key Lessons and perspectives from PMUY” highlighted that approximately 15-20% of the beneficiaries do not use LPG at all despite having a connection. This is due to multiple barriers, such as affordability, accessibility, and behavioral issues.
The second panel of the workshop was focused on the impact of PMUY on the environment and the health outcomes of women. The panel had senior representatives from the Centre for Catalyzing Change, the Institute of Economic Growth, Government Medical College and Hospital of Chandigarh, Jhpiego, and the Clinton Health Access Initiative (CHAI). The panelists mentioned how PMUY has helped cut the greenhouse gas emissions through the reduction of smoke generated by polluting fuels. The event was extensively covered by the print media as well as online news agencies.
To explore the media coverage in detail, please take a look at the links given below:
Only about 22% of direct benefit transfer recipients in Krishna District from the state of Andhra Pradesh (AP) in India had ever used an agent for cash out. Most withdraw their benefits at bank branches. This trend is disturbing for two main reasons. Firstly, Krishna District is believed to have the most advanced digital ecosystem of all 732 districts in India. Secondly, AP is recognized as the leading state in using technology to improve the delivery of public services, programs, and subsidies.
So why do people not use agents? In part, for rural people at least, because agents they are not available in or near their villages. But also for a range of reasons around their trust in those agents. Indeed, for many consumers, the kirana (grocery) store is not a desirable agent. This is because storekeepers are often key influencers of village gossip or are at its epicenter. Thus, a storekeeper who acts as the local agent presents a risk of loss of confidentiality within the community. Moreover, many households borrow from the store in times of need, so a storekeeper who is an agent creates a very real risk that the money they cash out may be commandeered to pay off debts.
Furthermore, many rural people travel each week, or every two weeks, to local market towns to perform tasks and conduct a variety of transactions. Therefore, they can go to the bank or to another agent in the market town frequently, with limited marginal costs. This option, however, overlooks two key factors in favor of continuing work to extend the “agent frontier” to establish agents closer to remote rural villages.
The first factor is gender—in many countries, only men travel to the market town. Yet, women want and need to conduct many of their financial affairs in confidence, often without the knowledge of their husbands. Access to agents within the locality will enable women to conduct financial transactions on their own. The second factor is small transactions, particularly savings, which can be encouraged by having agent points nearby. As IFC has already pointed out, the larger the transaction, the further people are willing to travel to conduct it (see figure below). Therefore, if we wish to help people save by putting aside small amounts outside the house, and thus away from the temptations of “frivolous spending”, or from the predations of marauding relatives, they will need an agent nearby.
These, and other issues related to the digital divide, make the work of MSC, BCG, and CGAP on expanding the rural frontier critical. Creative, country-specific solutions will be essential to enable profitable agents beyond the current frontier. Such solutions include:
Alignment of regulations, particularly on who is permitted to be an agent and what products they are allowed to offer, as well as commissions for processing G2P payments in Indonesia;
MSC conducted its initial analysis of consumer protection issues in India in 2016 as the BC agent model was rolling out at scale. We found that many people trusted the agents—not least of all because they were dependent on agents to conduct “agent-assisted” transactions. This seems to be changing. In our extensive fieldwork across India, we are increasingly hearing a dozen issues that are eroding trust in agents.
And the problem is not confined to India…
We drew similar conclusions of our analysis of the operations and impact assessment of the PKH conditional cash transfer system in Indonesia. We found that only 18% of beneficiaries used agents to withdraw their funds. In part, this was because agents are simply not present in many rural areas, so beneficiaries have to go to the nearest ATM. Yet even in areas where agents are present, many lack the liquidity to provide the big cash pay-outs as beneficiaries withdraw the entire PKH payment in one go.
As a result, even PKH facilitators and banks discourage agents as cash-out points. Moreover, agents charge informal fees to make cash payouts. The median fee charged is IDR 10,000 (USD 0.73) per disbursement, which makes ATMs more cost-effective.
Once again, consumers have lost trust in the agents’ ability to meet their needs in a transparent and honest manner.
We picked up similar issues in our study on customer service for CGAP back in 2015, when we identified three key issues that were eroding the trust of customers in three different, but relatively mature markets. These issues were 1. Service or network downtime; 2. Unauthorized fees charged by agents; and 3. Agent illiquidity.
It was clear from the analysis that many registered customers relapse into inactivity when they find it either impossible or too intimidating to make transactions. Customers cannot transact during system downtime, or in the case of absent or illiquid agents, and feel intimidated by the risks of sending money to a wrong number, or losing or compromising their PIN. Other customers choose to protect themselves by using over-the-counter (OTC) services in preference to registering or keeping money in their mobile money wallets. All these limit the use and potential of digital financial services.
Furthermore, given the importance of word of mouth, which MSC estimates drives around 60% of decision-making on the adoption of financial services, bad experiences spread quickly in rural communities—amplifying the erosion of trust. In the words of one customer, “We keep hearing mobile money users complaining about unstable network, delayed service, missing money, and many other negative comments about mobile money. Why then should we register for these services?”
This lack of trust represents a real and expensive problem for providers. The GSMA 2018 State of the Industry Report notes, “34.5% of the world’s registered accounts are now active [90 days]”. Or, put another way, only one in three of digital financial services accounts opened are used to conduct more than one transaction in three months. Given the cost of customer acquisition, one cannot help but think that investments to improve trust in digital financial services would make economic sense.
So what are the dirty dozen trust busters?
Supply side:
Lack of accessible agents: when there are too few accessible cash-in or cash-out agents to provide credible access to basic services. In many markets this is driven by agent closures and churn, which can leave customers without access to their money. In some countries, this access is a question of opening hours, for example, in Zambia and Kenya, where most agents only work the hours and days that bank branches do. Customers in these geographies are unable to find agents to serve their transactions on weekends or after 5 pm.
Service or system downtime: when technological issues mean that users are unable to access their funds or transact. Agents often use this as an excuse not transact when they face liquidity issues.
Agent illiquidity: when agents lack enough e-money or cash to make cash-in or cash-out transactions. Customers find it difficult to trust an agent who is frequently unable to conduct transactions.
Poor customer service: when agents are provided limited training and thus their ability to conduct transactions, explain products, or manage customer complaints is compromised. Poor or nonexistent agent and customer support through call centers can worsen the problem.
Lack of referral from the FSP: when the local branch does not refer customers to agents—this is seen as a sign that they are not sanctioned or to be trusted. In some instances, where branch staff fear a loss of jobs, we have seen branches undermining agents by saying that people should carry out transactions at the branch where it safer and cheaper.
Cumbersome sign-up process: when sign-up and know your customer (KYC) procedures are complex, convoluted, and time-consuming. Potential users, particularly those new to digital financial services, will often simply give up and not complete the registration process. When agents help with the sign-up and are apparently unable to make it quick and easy, trust is compromised.
Compromised confidentiality: everyone, not just those who depend on agent assistance, wants confidentiality in their financial transactions. As we have seen in India and elsewhere, customers often do not consider a hyper-local agent based in the same village as desirable for exactly this reason.
Lack of support from the financial service provider (FSP): when the FSP does not provide: 1. marketing support for the agent network to enhance its credibility and/or 2. monitoring of agents either directly, or through third party representatives commissioned to monitor and support the agent network.
Unauthorized charges: when agents charge additional amounts for transactions, as is now common across the globe.
Demand side:
Lack of digital skills: when potential users lack the knowledge or capability to use digital interfaces on their own. This is, unsurprisingly, more common among the oral segment for whom no intuitive interfaces have been rolled out.
Fear of technology: when potential users lack understanding of the technology, which makes them afraid of losing funds by making the wrong keystrokes or because funds “disappear”.
Fear of dependency: when users are dependent on agents for assistance, thus compromising confidentiality and increasing vulnerability to unauthorized charges or even fraud by agents.
Women in Bangladesh are often under-represented in terms of access to formal financial services. It is surprising because these women actively participate in economic activities and are often responsible for the management of household activities. In recent years, the gender gap in financial access has narrowed by the day, thanks to the rise of Digital Financial Services (DFS). This has helped dissolve the social and geographic boundaries that often restrict women’s access to financial services. Digitization of the Primary Education Stipend Program (PESP) is one of the many examples where the Government of Bangladesh works with DFS to encourage women to access financial services through their mobile phones.
Micro and small merchants are the life-force of the Bangladeshi economy, which makes them the most important gateway to greater financial inclusion. When it comes to retail payments, cash is still the undisputed king. However, the need of the hour in Bangladesh is an ecosystem where the retailers can accept digital payments and use these funds to pay their suppliers. When retailers accept digital payments, it also encourages the customers to keep funds in their digital or mobile wallets.
The Social Safety Net (SSN) program is an initiative of the Government of Bangladesh that caters to the economically vulnerable and socially or physically disadvantaged people. However, the traditional method of stipend disbursement poses some challenges of its own, especially for people who are already in need of assistance. The digitization of this process has ensured the funds are paid in full, to the right person, and at the right time. Currently, 10.2 million people receive their SSN stipend digitally through biometric authentication at Union Digital Centers (UDC). On top of the added convenience in receiving payments, beneficiaries now also have the option to access other financial services through agent banking.
This site uses cookies, by continuing your navigation, you agree with our Cookie Policy.Ok
Only about 
