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REPORT: E-Payments to Citizens of Poor Nations Rise Sharply

More People in Developing Countries Receiving Aid Electronically
Published:   November 19, 2012

Washington, DC — The way governments give aid to citizens in need has changed dramatically in recent years: the estimated number of government-to-person cash payments transferred electronically in 2012 has more than doubled since 2009 — from 25 to 61 percent, according to a report released today by the New America Foundation’s Global Assets Project (GAP).

That data point is representative only of the countries examined by the Global Savings and Social Protection Initiative (GSSP), which include the poorest and most vulnerable populations of the world. The report, the most detailed global data set of its kind, is the accumulation of research under GSSP, which launched in October 2011 to explore government/aid payments and savings programs for the world’s poor.

“We are witnessing an unprecedented shift to cashlessness in aid payments to the world’s poorest citizens.” said GAP Director Jamie Zimmerman. “Yet while electronic payments are more secure and efficient than cash, governments are only beginning to take advantage of the real opportunity this shift presents: to leverage these systems to advance financial inclusion and empowerment of their most vulnerable citizens.”

The report aggregated existing data and produced original data from 84 social protection payment programs across 43 countries in Latin America and the Caribbean, Sub-Saharan Africa, and Asia that in total reach roughly 174 million individuals. The entire GSSP data set covers approx 178 million individuals in 105 programs in 55 countries.

Key findings include:

• More than 60 percent of cash-transfer recipients receive their aid payment electronically and are able to store their payments for future use.
• 103 million people across 40 programs are paid into a bank account.
• Despite the rapid growth of mobile banking for the poor, only 2 programs use mobile phones for payments, though experimentation is on the rise.
• Sub-Saharan Africa lags behind Latin America and Asia with respect to social protection programs using e-payments.
• 27 percent of programs encourage their recipients to save or build assets.

The report offers recommendations on how to strengthen these programs, including by: adopting electronic payments where feasible, ensuring greater access to bank accounts that meet the needs of low-income people, and experimenting with various methods of encouraging savings habits.

Read the full report, From Protection to Investment: Understanding the Global Shift to Financially Inclusive Social Protection Payment Systems.

For more information or to schedule an interview with an author of the report, please contact Clara Hogan.

About the New America Foundation
New America Foundation is a nonprofit, nonpartisan public policy institute that invests in new thinkers and new ideas to address the next generation of challenges facing the United States.

About the Global Assets Project
The Global Assets Project (GAP) aims to chart a new agenda for innovation at the frontier of global poverty reduction by creating and advancing new tools and policies that build savings and assets for poor around the world.

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