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Financial Inclusion for the Poorest Women in Pakistan


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CGAP and Habib Bank Limited (HBL), the largest commercial bank in Pakistan, recently worked with the design firm Continuum Innovation to better understand the constraints of linking government-to-person (G2P) payments with financial inclusion in poor areas in Pakistan.

The ethnographic research focused on women beneficiaries of the Benazir Income Support Program (BISP).

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Financial Inclusion for the Poorest Women in Pakistan

  1. 1. Financial Inclusion for the Poorest Women in Pakistan 10 January 2014
  2. 2. G2P Financial Inclusion for the Poorest Women in Pakistan
  3. 3. T h e Pr o j e c t CGAP and Habib Bank Limited (HBL), the largest commercial bank in Pakistan, recently worked with the design firm Continuum Innovation to better understand the constraints of linking government-to-person (G2P) payments with financial inclusion in poor areas in Pakistan. The ethnographic research focused on women beneficiaries of the Benazir Income Support Program (BISP). Pr o j e c t G o a ls CGAP • Gain a deeper understanding of G2P beneficiaries in the Benazir Income Support Program, BISP, and assess whether or not they are capable of being “banked.” • Increase financial inclusion amongst BISP beneficiaries • Institutionalize Human Centered Design Process at HBL HBL • Increase use of Branchless Banking
  4. 4. BISP The government of Pakistan established the Benazir Income Support Programme, BISP in 2008 to distribute cash payments to low income families. Currently, BISP distributes PKR 3,000 each quarter to about 5 million of the poorest women in Pakistan. PKR 3,000 is about $30 at current exchange rates, so the payments are worth about $10 a month.
  5. 5. Researcher (Harry) BISP Recipient Facilitator (Nadia) Researcher (Rachel) Translator We worked directly with BISP recipients to understand their values, attitudes and behaviors, understand the problems they face, and to create and test solutions that work for them. Only once we have a human solution do we look for ways to bring it into the business.
  6. 6. This woman’s husband is a welder and she makes and sells these key chains. Each interview lasted about an hour. We asked about their life. Their sources of income, social circles, anxieties and finally, their financial behaviors, thoughts on BISP and banking.
  7. 7. I N T E RV I E W S Base Location Type Number of Subjects Lahore Sanda urban 6 Lahore Jindra village on the rural outskirts of urban center 4 Lahore Sharif Pura urban 4 Multan Multan urban 6 Multan Lodhran rural 6 Multan Mailsi village in rural area 5
  8. 8. W H AT W E L E A R N E D
  9. 9. W H AT W E L E A R N E D BISP recipients are very poor and live day-to-day, or at best, month-to-month, and they are all illiterate. Their primary concerns were making sure they could pay for food, electricity, rent (in the city), medicine and saving for dowries for their daughters. For mothers of daughters a few years before getting married, dowry savings were a pressing concern.
  10. 10. Rural Karim is a widow from Lodhran. Her largest expense is medicine. She is completely illiterate and can’t identify roman numerals, even on rupee notes. Her daughter purchases goods for her. She has to travel 7km and spends 100-550PKR to get her BISP payment and is not allowed in the bank. REPRESENTATIVE BENEFICIARIES This beneficiary’s husband doesn’t contribute financially. Her eldest daughter contributes 4000-5000 per month. She uses BISP funds for rent and said, “how much we get, we eat.” When there is not enough incoming money she borrows “door to door.” Urban Just Getting By Parveen sews clothes at home and her husband is a bike mechanic. She has 4 kids and 3 of them are literate. Though she owes 3000 PKR for the electricity bill she saves in a trunk in her home for a dowry. When she first married she saved “pocket money” from her husband to buy the sewing machine she now uses for work. Able to Save Bushra is married with three kids and has another one on the way. She works as a dishwasher and her husband is an electrician. She was the most literate of all the women we spoke to. She was able to write and read roman numerals in English. The ATM is right around the corner. She is saving for a trip to Mecca.
  11. 11. I R R E G U L A R PAY M E N T S All of the women interviewed were grateful for the BISP payments, which were an important part of their budget or of their savings plan. However, there was a pervasive sense of distrust of the BISP program because of the irregularity of the payments. Many of the women told of going to the bank or an agent because they heard that there had been a distribution of money, but their account was empty. They did not know the reason they did not get their money. BISP money has historically been paid irregularly and at different times for different people in the same village.
  12. 12. N O A C C E S S T O M O N E Y I N D E P E N D E N T LY Most women were not able to get their money themselves from an ATM, or did not understand what was happening when they got their money from an agent. Some women got help using the ATM from a respected female friend from the neighborhood or a relative. Younger kids, older women or men seem to have more agency to engage with a bank. Some women got help from someone at the bank. At one branch we watched the branch “chai wallah” or tea boy volunteer his time helping the women at the ATM.
  13. 13. This woman arrived at the ATM with two other female family members and her son. She was not able to access her money for an entire year and a half and was receiving it all at once. The “Chai Wallah,” or building’s tea boy is helping her withdraw her money.
  14. 14. For every woman who received a windfall, we saw countless others who couldn’t get any money out. The current irregularity of payments, and difficulty accessing the bank have got in the way of the women building enough personal trust and confidence in the system for them to leave their money there. The system has not demonstrated that it is trustworthy, and the women do not have confidence that they could get their money out of the system if they needed it.
  15. 15. The women’s illiteracy, lack of agency outside the house and lack of experience with banking makes it: 1 Difficult for them to get their money independently. 2 Difficult for them to play their expected role in taking advantage of the transparency in the system to monitor the correctness of their payments or amount in their account.
  16. 16. GROWING BRANCHLESS BANKING PROVIDE SOM ETHING USEFUL ESTABLISH TRUST Reliability Communication Transparency Consistency and Practice Take something BISP recipients do already and make it better REM OVE BARRIERS Process communication Proximity Access Account opening
  17. 17. U N D E R S TA N D I N G L I T E R A C Y & C O M M U N I C AT I O N T E S T I N G
  18. 18. This women was unable to understand written numbers NUMERACY Illiteracy is the hidden hurdle that makes it difficult to bring financial inclusion to BISP recipients. Systems that should work in theory break down when beneficiaries, the most important player in the system, cannot interact with the system themselves.
  19. 19. The standard for literacy in Pakistan is to be able to write your own name. Most women in Pakistan are unable to get over even this low bar. Literacy studies in other regions report much more capability than we found in the rural areas in Southern Punjab we visited. The challenge of communicating with BISP recipients is extreme.
  20. 20. DIRECTION Understanding numerals is highly contextual. For example, a beneficiary was able to enter in the following phone number but read and entered in the number from right to left, the way Urdu script is read. We saw the same issue when it came to entering PINs into an ATM.
  21. 21. WORDS This phone receipt was not understood by recipients This message, which only consists of numbers, was comprehensible Being illiterate is more limiting than not being able to read. Any words can complicate and confuse the reader, sending the implicit message that it is not for them.
  22. 22. I N F O R M AT I O N H I E R A R C H Y The recipient misunderstood ATM receipt and we could have defrauded her of 1000 PKR. She did understand the large font on the redesigned agent receipt.
  23. 23. Although the women we all illiterate and unfamiliar with technology, this does not mean they are unable to learn or that they lacked other knowledge. We learned this from an old woman who had spent her entire life in the country, and could not use a cell phone. But when we described some financial products to her, she immediately understood how to use them to her advantage in ways that our team had not anticipated.
  24. 24. COMMUNICATION Our recommendation is to design communication specifically for illiterate people. This must be tested in the field before widespread dissemination. In particular, we recommend using photographs to teach BISP recipients how to use the banking system, and simple, large text of only the most relevant information to increase the transparency in the system.
  25. 25. This is an example of what a simple ATM poster could look like
  26. 26. This simple, photographic poster provided ample guidance. Here the beneficiary was focused intently on following the poster to her right.
  27. 27. This simple, photographic poster provided ample guidance. Here the beneficiary was focused intently on following the poster to her right.
  28. 28. After completing the interview. She asked our team member Sara, to show her the posters again.
  29. 29. Then, using the posters, she explained the process of using an ATM to her sister-in-law in the adjoining house.
  30. 30. In response to the widespread desire to learn and access ATMs independently, we created and tested smaller, shareable versions of the poster.
  31. 31. There was confusion around what was going on at an agent hub. There was no transparency into their account balance or history and the women were not able to read their receipts.
  32. 32. We tested simple posters with the beneficiaries to set expectations and explain the agent process. Recipients were able to understand the posters and articulate how their experience differed.
  33. 33. This is an example of what a simple agents poster could look like. We also made a shareable version.
  34. 34. T R A N S PA R E N C Y R E C O M M E N D AT I O N S Making it easier for BISP recipients to monitor their payments makes it more difficult for them to be defrauded. These are examples of communication of amount paid that are more transparent because illiterate BISP recipients are more likely to understand them.
  36. 36. GROWING BRANCHLESS BANKING Rather than try to change behavior, we built product ideas around current behavior 1 2 3 4 5 6 7 Committee saving system Beneficiaries commonly use informal and traditional saving systems. There is significant peer pressure involved with maintaining regular payment. The participants appreciate that the money is kept by a trusted member in the community but is also out of reach. Worry about when BISP money will arrive Because of the unreliability of BISP payments, beneficiaries have to borrow informally. Their lack of access to BISP funds also creates accidental accumulated savings in their account. Community lending and financial health Informal lending occurs frequently with one’s reputation as the only collateral. A beneficiary receiving an informal loan becomes indebted to her community and depending on the circumstance, the loan may sometimes be considered a gift. When it is a loan, the beneficiaries are compelled to pay it back to maintain the community’s financial health. Accumulated debt on electricity bill Electricity bills vary monthly and are a frequent source of stress for beneficiary families. Debt is frequently incurred on these bills and the fear of one's electricity being cut is pervasive. Some of our beneficiaries were familiar with a bank as “ a place where you pay your electricity bill.” Trunk to store money Beneficiaries frequently store money at home in a trunk. Most often, it is savings for their daughter's dowry. At home, their savings feel tangible and easily accessible. Khatta at the Karyana These stores provide informal credit to members of their neighborhood. In order to maintain access to the store and keep up their reputation in the community, beneficiaries must maintain good credit. Group agency Beneficiaries feel safer and more comfortable outside of their home with groups of peer women. These groups are often led by a trusted and more educated female from the community.
  37. 37. PRODUCTS A simple savings product and a loan product which are just different options for when a BISP recipient receives her money– these products are a natural extension of how the recipients are thinking about their interactions with the bank today and are stepping stones to fuller financial inclusion.
  38. 38. Advancing financial inclusion to improve the lives of the poor 38