Financial Inclusion for the Poorest Women in Pakistan

10 January 2014

Financial Inclusion for the Poorest Women in

Pakistan

G2P

The ProjectCGAP 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).

Project Goals

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

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.

BISP

Researcher(Harry)

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.

BISPRecipient

Facilitator(Nadia)

Researcher(Rachel)

Translator

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.

Base Location Type Number of Subjects

Lahore Sanda urban 6

Jindravillage on the rural outskirts of urban center

4

Sharif Pura urban 4

Multan Multan urban 6

Lodhran rural 6

Mailsi village in rural area 5

INTERVIEWS

Lahore

Lahore

Multan

Multan

WHAT WE LEARNED

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.

WHAT WE LEARNED

Ru

ral

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.”

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.

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.

Urb

an

Able to SaveJust Getting By

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

IRREGULAR PAYMENTS

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.

NO ACCESS TO MONEY INDEPENDENTLY

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.

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.

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.

The women’s illiteracy, lack of agency outside the house and lack of experience with banking makes it:

Difficult for them to get their money independently.

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.

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GROWING BRANCHLESS BANKING

ESTABLISH TRUSTPROVIDE

SOMETHING USEFUL

ReliabilityCommunicationTransparency

Consistency and Practice

Take something BISP recipients do already and make it better

REMOVE BARRIERS

Process communicationProximityAccess

Account opening

UNDERSTANDING LITERACY & COMMUNICATION TESTING

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.

This women was unable to understand

written numbers

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.

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.

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.

WORDS

INFORMATION HIERARCHY

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. 

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.

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.

This is an example of

what a simple ATM poster

could look like

This simple, photographic poster

provided ample guidance. Here the

beneficiary was focused intently on following the poster

to her right.

This simple, photographic poster

provided ample guidance. Here the

beneficiary was focused intently on following the poster

to her right.

After completing the interview. She asked our team member

Sara, to show her the posters again.

Then, using the posters, she

explained the process of using an ATM to

her sister-in-law in the adjoining house.

In response to the widespread desire to learn and access ATMs

independently, we created and tested smaller, share-able

versions of the poster.

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.

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.

This is an example of what a simple

agents poster could look like. We

also made a shareable version.

TRANSPARENCY RECOMMENDATIONS

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.

PRODUCTS & PRODUCT TESTING

GROWING BRANCHLESS BANKINGRather than try to change behavior, we built product ideas around current behavior

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 arriveBecause 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 billElectricity 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 moneyBeneficiaries 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 KaryanaThese 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 agencyBeneficiaries 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. 

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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.

PRODUCTS

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Advancing financial inclusion to improve the lives of the poor

www.cgap.org