Delivering social program benefits using mobile financial services

This post is written by Muhymin Chowdhury, the Deputy Project Manager for the bKash Mobile Money project in Bangladesh.

Photo credit: Raisa Chowdhury

Photo credit: Raisa Chowdhury

On a recent work trip I had the opportunity to visit Chars Livelihood Programme (CLP) beneficiaries in the northern part of Bangladesh. ‘Chars’ are riverine islands created and destroyed by floods and erosion. These islands are located in very remote areas, requiring a minimum of twelve hours (via bus, car, motorbikes, boat and motorbikes again) to get to the nearest island from the capital city, Dhaka. The project beneficiaries receive a monthly stipend of Tk 350 (equivalent to $ 4.38), which is delivered to them in cash. In order to reduce the hassle of travel and carrying cash, CLP has started using bKash (a mobile financial services company) to transfer the stipend directly to their project beneficiaries. Our main motivation for the trip was to:

  • Observe how the service is rolling out
  • Understand whether people start using bKash for other purposes (e.g. savings, money, domestic money transfer)
  • Identify spillover effects of the service to non-project beneficiaries.

During the visit I had the opportunity to meet with Selima Begum, a CLP beneficiary. Selima has been living in the chars for 18 years. She has two siblings. Her husband is a rickshaw driver in Dhaka. She has been a CLP beneficiary for 11 months. She sustains the family through her husband’s income and maintaining a small dairy farm which she has set up with CLP support. Her husband would previously send money to her through village acquaintances.

‘I would never know when the money would arrive. There was no way to track it. The money would also get stolen sometimes. But now as CLP uses the bKash service I get my stipend on time and my husband can also send money to me instantly using bKash. Other members in the villages are getting encouraged to use the system and opening accounts. Some even keep money in their phones for a long time.’

After various individual and group discussions, it was pleasing to see that people are slowly picking up the service, that non-CLP members are also utilizing the benefit of instant money transfer, and that some have even started using the phone as a safekeeping tool on their own.


3 thoughts on “Delivering social program benefits using mobile financial services

  1. Good initiative. But it is not clear how beneficiaries take cash out from their mobiles.

    What is the point in keeping money in mobiles that does not earn them any interest?

    • The money is transferred to their bkash mobile phone account. The beneficiaries then visit any bKash agent nearby (currently more than 30,000+ across the country) to cash out. The cash out process is described in detail here:

      Although it does not earn them any interest, the phone is now used as a safekeeping tool which greatly reduces the risk of money getting stolen by others. It is also proving to be a good way to control unnecessary expenses.

    • Thank you for your question! bKash is a mobile financial service, so beneficiaries can use the money in their mobile wallet in a number of ways. They can pay for goods and services at merchants, transfer to friends and family, or withdraw their cash at one of over 30,000 agents nationwide – so it’s technically like a current/checking account. The money isn’t stored on the phone – it’s in a regulated account, as bKash is a subsidiary of BRAC Bank.

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