At the end of a three-year project on WASH loans, Friends of Women World Banking (FWWB) India contracted MSC to conduct an impact evaluation of its WASH loan portfolio. The WASH loan project involved the microfinance institutions (MFIs) ESAF and Grameen Koota (now CreditAccess Grameen) that received funding from FWWB. These MFIs were tasked to develop and offer water and sanitation loan (WASH) products to their customers. The loans were designed to finance the building of toilets and to facilitate water connections from public utilities.
MSC was engaged to conduct the impact evaluation in the cities of Nagpur and Bangalore. The objective was to understand the key success factors to run a WASH loan program sustainably, as well as the nature of challenges and issues that microfinance institutions faced in implementing such programs. MSC conducted two rounds of evaluation and recommended changes to the product features and product communication strategy to help ESAF and Grameen Koota improve the loan products and to scale them.
Based on this work, FWWB supported 370 institutions that disbursed more than 45,000 toilet loans. The FWWB project has had an impact on over 1 million women across 17 states in India.
MSC works with governments to implement large-scale programs. We provide strategic support by establishing technical support units and project management units. Our ground-level support provides the initial momentum for the respective programs and establishes their governance structure.
A key project in this context has been Pathways to Enhancing Financial Inclusion (PEFI) project in aspirational district. PEFI was established to achieve the Sustainable Development Goals by supporting NITI-Aayog (National Institution for Transforming India), the policy think tank of the Indian government.
At the time of writing, MSC had been working to enhance the status of six selected indicators of financial inclusion in 27 aspirational districts. These districts had a cumulative population of 44 million people, spread across eight states in India. The project involved stationing financial inclusion coordinators in each district to work alongside the existing government and banking machinery to support, develop, and customize models of financial inclusion.
The project addresses four key issues:
- Improving the reach and performance of agent networks.
- Use of self-help groups (SHGs) to promote digital financial inclusion.
- Improving uptake and usage by women.
- Delivering effective financial education.
MSC designs, re-engineers, and digitizes processes for large-scale government programs. We use elements of human-centered design and our acclaimed process design toolkit to execute such assignments. A key project in this area is the re-engineering of processes for the rural employment program (MGNREGA) of the government of the state of Jharkhand in India.
MSC identified gaps in the processes and system of disbursement of MGNREGA payments through post offices. We recommended alternative withdrawal mechanisms, including the use of banking agents.
Through this work, MSC helped the Government of Jharkhand to reduce the time it takes to pay beneficiaries from 28 days to one day using India Post accounts to receive funds. Our intervention had an impact on 6.7 million active MGNREGA workers. MSC submitted the improved MGNREGA process maps to the Ministry of Rural Development (MoRD), which forwarded these to India Post for a roll-out across the country.
MSC provides sustained monitoring and evaluation support to improve systems and processes for clients. We use a mixed-method approach that stems from our signature in-house Market Insights for Innovation and Design (Mi4iD) approach.
A key assignment for MSC in this area was the direct benefit transfer (DBT) initiative in fertilizer in India. MSC worked with the Ministry of Chemicals and Fertilizer (MoC&F) to design and implement reforms in the highly complex fertilizer distribution system. MSC designed the initial pilot in two districts and deployed a full-time team to support the pilot. The pilots successfully drove changes to the design of MoC&F interventions.
MSC helped the government to roll out the fertilizer subsidy project in additional districts and supported a concurrent evaluation of the project. The government decided to roll out the project across India based on our recommendations. At the time of writing, we have been conducting a pan-India evaluation of the DBT program.
Because of MSC’s intervention, the time it takes per transaction with biometrics reduced from 10.5 minutes to five minutes, margins for retailers doubled, and many other technical changes came into effect. This project will have an impact on 118 million farmers and result in efficiencies on an annual subsidy of USD 11 billion.
MSC works with governments to assess the readiness of their enabling G2P infrastructure. At the program-level, we also assist in the design, test, and roll out of G2P programs.
MSC’s key projects in this area include the development of a roadmap for the Government of Malawi to transition from cash to digital G2P payments, and the PAHAL and Ujjwala LPG (cooking gas) programs in India. We also designed the processes to route subsidy for LPG to the bank accounts of beneficiaries and assessed the impact of the Ujjwala scheme.
MSC’s interventions helped the Indian government to eliminate 33 million duplicate or “ghost” beneficiaries. The government now provides a subsidy of about INR 2,514 (USD 34) for LPG cylinders to each eligible household in a year. Estimates indicate that the total savings for the Indian government from the move to digital cash transfers amounts to USD 744 million per year.
Bantuan Pangan Non Tunai (BPNT) is the program for food subsidy transfer in Indonesia, where MSC provided critical inputs to the government to remove bottlenecks. As of 2018, the program reached 5 million beneficiaries and will reach 10 million by 2019. The budget for this is around USD 1.4 billion.
MSC helps design innovative solutions for complex public problems, conducts pilot testing, and creates strategies to scale up the best solutions.
A good example of this is MSC’s on-going, long-term, advisory support to the Government of Indonesia to develop a strategy and conduct pilot for its electronic know-your-customer (e-KYC) process. As part of the engagement, the MSC team conducted a pilot using digital identity (e-KTP).
This transformative intervention will have a positive impact on the 60 million-plus unbanked people in Indonesia by streamlining the onboarding process for opening accounts. It will also facilitate the development and delivery of a wide range of services that FinTechs as well as government and private sector service providers in the country offer.