From Protection to Investment

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 doubled from 2012 to 2009 — from 25 to 61 percent according to the data of countries examined by the Global Savings and Social Protection Initiative (GSSP). This shift presents new opportunities not only to advance digital delivery of social protection and government-to-person models, but also to create and nurture environments and policies conducive to savings and asset development among the globe’s poorest and most excluded populations.

This report, the most detailed global data set of its kind, is the accumulation of research under GSSP, which was made possible by the generous support of the Ford Foundation, the Citi Foundation, CGAP (Consultative Group to Assist the Poor), and the Nike Foundation. The initiative was launched in October 2011 in response to several global trends including:

• The global proliferation of cash-based payment systems, such as conditional and unconditional government and aid payments;
• Technological advancements such as mobile money and digitization of cash flows;
• Increased recognition of the need for financial access and asset-building opportunities.

In analyzing these trends, 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 approximately 178 million individuals in 105 programs in 55 countries and include the poorest and most vulnerable populations of the world.

Key findings include:

• More than 60 percent 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 currently utilize 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.
• Only 27 percent of programs encourage their recipients to save or build assets.  

Additionally, 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. 

To read the full report, click here.