Farzana*, 45, stands with her nine-year-old daughter in the scorching heat of the southern Pakistan town of Larkana. She is waiting in a long queue to hand her mobile phone and computerized national identity card to a banking agent. Farzana visits the agent every few months to collect her quarterly welfare payment of 4,500 Pakistani Rupees ($40).
Farzana doesn’t know how to retrieve the personal identification number sent by text message to her mobile phone to notify her of payment into her account, so she hands the phone over to the agent. The agent sees the PIN and uploads it into the system to verify her personal details. He then hands Farzana her grant, asks her for a thumbprint and gives her a record of the payment.
Charagh*, 78, is a widow suffering from advanced Parkinson’s disease. She travels by bus with her 20-year-old son to the nearest ATM – located on the fringes of her remote village in Bahawalpur, Southern Punjab. The journey takes three hours there and back.
Once she’s there, Charagh unwraps an embroidered handkerchief and gives the debit card inside it to her son. She wears her identity card – her most precious asset – as a necklace. Her son, who has only attended primary school, gets the money from the ATM and gives it to his frail mother.
These are the stories of some of the 16 women I met during my research on Pakistan’s Benazir Income Support Programme (BISP) – the largest government-run social cash program run exclusively for women in southern Asia.
Every quarter, 5.4 million women from low-income households in Pakistan receive welfare payments using digital means. The use of digital tools, such as the Benazir Debit Card – which is embedded with a chip carrying the user’s information – and phone texts, is intended to make the system of receiving payments more convenient and safer for women to use.
My research shows it also has the unexpected effect of raising the status of women by granting them more decision-making powers, both within their households and in the political sphere.
Banking the Unbanked
When BISP was launched in 2008, welfare payments were disbursed in cash or money orders via local parliamentarians and postmen. In 2010, to improve transparency, visibility, security and efficiency in the delivery of social cash, the program shifted to electronic payments made directly into beneficiaries’ bank accounts.
Pakistan accounts for more than 100 million of the world’s 2.5 billion unbanked people. From a population of more than 190 million, only 13 percent of adults have a formal bank account, as reported by the 2014 Global Findex. Even more alarming, fewer than 5 percent of women in Pakistan are included in the formal financial sector, compared with south Asia’s average of 37 percent.
Digitizing BISP payments has had the benefit of ensuring that low-income women have access to bank accounts. For most of the women registered on the program, being enrolled was the first time they had ever had one.
To date, 94 percent of beneficiaries of BISP receive electronic payments. They provide flexibility and convenience to women, letting them cash their payments at various locations – banking agents, ATMs and point-of-sale machines – using a secure PIN. This eliminates the practice of some politicians or postmen demanding bribes for delivering cash payments to people’s homes.
My study, completed in 2016, shows that digital innovation has led to mass financial inclusion. But this inclusion only goes so far. In the program’s current form, beneficiaries are provided bank accounts with the facility to withdraw funds only, while access to other banking services, such as making payments, depositing savings and obtaining loans, is blocked. This limits their participation in entrepreneurial activities.
Gaining a Voice
The use of digital technologies for receiving BISP payments can lead to greater social and political inclusion of female beneficiaries.
Even women observing purdah (those who are veiled) have been allowed to step out of their homes to collect payments, as long as they travel in groups or are accompanied by a male family member. This small victory indicates a major social transformation for Pakistan.
“I never thought that one day, I could walk into a bank or agent’s shop – banks are for the rich,” said Rani*, 45, whose husband is a fruit vendor with monthly earnings of 5,030 Pakistani rupees ($45). “It was the first time I ever held a 1,000-rupee note in my hands,” she told me.
To receive BISP payments into their bank accounts, women must register with the National Database and Registration Authority to obtain computerized national identity cards. This means that many women’s identities as citizens of the state have been established for the very first time. This, too, is revolutionary. Being registered as a citizen allows women to exercise their right to vote in elections and access public services.
Naheed*, 30, told me having an identity card meant “my voice can be heard not only in my extended family, but in the political system … I am very excited that I can vote now, as I’ve never voted before.”
When I spoke with Bilquis*, 37, she told me that before receiving BISP grants, she used to struggle to feed her family of six. Her enrollment in the program has helped her fight poverty, which has also given her the confidence to demand respect from her husband.
“My self-esteem has increased as I no longer need to ask family or friends for money,” she said. “I have an identity card and get money so my husband values and respects me now. He can’t be rude to me any more.”
Lessons for the Rest of the World
The success of BISP’s digital payment innovative system has inspired countries like Bangladesh, India, Ghana, Mongolia, Cambodia and Nepal to initiate similar programs to improve the socio-economic livelihoods of poor citizens.
As in Pakistan, in many of these countries ingrained gender inequality leads to the social and economic exclusion of women. My research shows that financial freedom through digital payments can be a route to social inclusion.
The main drawback I found is that most women in Pakistan are illiterate, which can present hurdles when using technology such as ATMs. As a step forward, I suggest women receive digital training before being given access to digital payments. Other infrastructure constraints, such as weak mobile signals and power outages in homes, affect mobile phone usage for the receipt of timely payments.
The next step in achieving true financial inclusion for women will be to ensure wider access to financial services beyond bank accounts to promote entrepreneurial activities among some of the world’s poorest women.
*Some names have been changed to protect identities.
The views expressed in this article belong to its author and do not necessarily reflect the editorial policy of Women’s Advancement Deeply.