Government Program Innovations

1. Government Program Innovations Bangladesh Case Study Presented by: Pial Islam, Managing Partner, pi STRATEGY CONSULTING

2. Introduction • The Employment Generation Program for the Poorest (EGPP) was introduced by the Government of Bangladesh in 2008 to cushion the negative effects of the food crisis on the poor and was then reconstituted to provide short-term employment during agricultural lean seasons to poor and vulnerable households. • The implementing ministry for EGPP is the Ministry of Food and Disaster Management (MOFDM). • The program runs in two cycles a year. • During the 2011– 12 session of the program, the total allocated budget was around 125 million USD and more than 600 thousands beneficiaries were provided with employment in around 4,500 unions covering all 64 districts of the country .

3. Areas of Concern • Two key aspects of the EGPP are: • Attendance Verification • Payment Mechanism • Concerns such as irregularities in muster roles at the worksite, the payment of ghost workers or payments made to beneficiaries without work having been performed were being reported. • Moreover, payment in hand-to-hand cash transactions on weekly basis with manual processing and record keeping left considerable exposure to misappropriation, payment mismanagement, and abuse in individual payment cases (delays, bribes, collusion, etc).

4. Goals of the Interventions • Implementing an Attendance Verification System (AVS) to authenticate the beneficiary and to generate an accurate attendance record. • Implementing a Payment Service Provisioning (PSP) system to reduce manual processing in the system and to lower current malpractices in the payment mechanism. Pilot Implementation Partners:

5. AVS – Identified Options AVS Card Based Mobile Based Biometric Option1 : Image Capturing Option1 : Finger Print Scanning Option1 : Bangladesh Postal Cash Card (PCC) Option2 : PIN Verification Option3 : SIM Tracking Option4a : Mobile VAS (app based) Option4b : Mobile VAS (USSD based)

6. Card based AVS • Option 1: Bangladesh Postal Cash Card (PCC) • Each beneficiary will be provided with a PCC along with a PIN. PCC will contain the photo and name of the beneficiary. Field Supervisor, who is responsible for attendance, will be given a POS device assigned to a particular work site. Beneficiary will swipe the PCC in POS and then enter PIN. If they match, the attendance will be recorded in a back-end central server. Mobile Network EGPP Server Swipe the Card, Enter PIN BANGLADESH POST Photo Postal Cash Card 18 digit Card No. Field Supervisor Beneficiary POS PCC

7. Mobile based AVS • Option 4a: Mobile VAS (app. based) • A customized mobile software is installed in Field Supervisor's mobile phone and each beneficiary has an ID and PIN to verify his/her identity through that app. During attendance session, Field Supervisor prompts the menu and launches the attendance verification app in his mobile. The app gets synced with the central database and subsequently asks for PIN in random order of the listed beneficiaries in that particular worksite. If the entered PIN matches, attendance of the beneficiary will be recorded in the central server connected through MNO network. Mobile Network Mobile app Enter PIN when prompted EGPP Server Field Supervisor Beneficiary

8. PSP– Identified Options PSP Mobile Based Card Based Option1 : bKash Option1 : Bangladesh Postal Cash Card (PCC) Option2 : DBBL mobile banking Option3 : Electronic Money Transfer service (EMTS) of BPO

9. Card based PSP • Option1 : Bangladesh Postal Cash Card (PCC) EMTS • BPO (Bangladesh Post Office) will provide PCC service at the nearby post office of the work site. A beneficiary will be able to withdraw his/her desired amount during the working hours of the post office by using the cash card and verifying the PIN. Mobile Network Bangladesh Post Office Server Swipe Card and enter PIN POS at Post Office Branch Beneficiary Withdraw Cash

10. Mobile based PSP • Option 1 & 2: DBBL & bKash • Two competing providers have launched mobile banking services last year in Bangladesh. These are: Dutch Bangla Bank Limited (DBBL) and bKash. Each has wide agent networks with comparable subscriber coverage. Beneficiaries who have mobile phones can open an account at one of the agent points. The weekly payment will be disbursed into beneficiary’s account. The beneficiaries can withdraw money from their mobile banking accounts from any of the cash points. Use Mobile banking account, verified with a PIN Mobile Network Mobile banking server Beneficiary Mobile Banking Agent Withdraw cash

11. Cost Comparisons: AVS Options SIM Tracking Image Capturing PIN Verification Complexity* of Implementation Application-based VAS USSD-based VAS Per Beneficiary Cost *Complexity of implementation in terms of required time, design, development, scalability, etc

12. Cost Comparisons: PSP Options One week’s Payment (875 BDT) Two weeks’ Payment (1750 BDT) Charge (in BDT) Total Charge = (Cash in + Fund Transfer + Cash Out) Charge W2W = Wallet to Wallet Analysis shown uses January 20, 2012 data. Amount (in BDT)

13. Proposed Solution Design AVS PSP Mobile VAS (app based) Mobile Banking accounts Mobile Based Option 1 or 2 Option 4a Option 1 Option 1 Postal Card Solution Postal Cash Card Solution Card Based Pre-Pilot

14. Pre Pilot • To asses the proposed solution designs in a smaller scale a pre pilot program was conducted: • Only the card based solution for AVS was tested in the program. • It covered about 220 beneficiaries across four work sites in a single district. • The program ran for six weeks during a regular EGPP session. • The card-based solution ran in parallel to the existing paper-based system to allow for comparative analysis between the two systems. • A brief evaluation was conducted at the end of the pre pilot to extract lessons that can inform future work in this area (initially a larger scale pilot and eventually the nation-wide roll-out). • Some findings from the evaluation are provided in the next slide.

15. Pre Pilot Evaluation: Early Findings • Most of the beneficiaries and field supervisors prefer the card-based attendance system to conventional paper-based attendance system and cited ‘reduction of corruption’ as one of the prime reasons behind their preference • Many beneficiaries (especially men) found it hard to remember the 4 digit PIN, which they need to enter into the POS machine in order to record attendance.

16. PIN Experiment • To better explore the hard-to-recall-PIN phenomenon and identify potential solutions, a PIN Experiment was conducted during pre pilot. The PIN Experiment had two key components: • Pattern Recognition: • Memory Association: • Participants were instructed on how to link numbers with things in their daily lives, families, and surroundings etc. For example, one of the participants said that he has two grandchildren. He was guided to recall the digit ‘2’ through remembering the number of grandchildren he has.

17. PIN Experiment (contd.) • The insights that emerged from the PIN Experiment: • Exposure to mobile keypads enhanced familiarity with English digits • New tools require more effort initially, but leads to improved performance eventually • 3-digit PINs may offer better value than 4-digit PINs, when the trade-offs are considered

18. The Pilot Scale of Pilot • Based on the learning from the pre-pilot program and the PIN experiment, a more involved pilot program, which will cover about 10,000 beneficiaries, is currently being implemented. • Half of the beneficiaries will be offered a card-based system for AVS and PSP. • The remaining half will be offered a mobile-based systemfor AVS and PSP. Bhurungamari, Kurigram Bishwamvarpur, Sunamganj Trishal, Mymensingh Dashmina, Patuakhali

19. The Pilot (contd.) AVS PSP • . Each beneficiary will be given a mobile phone so that they can open a mobile banking account. Based on the attendance report generated from the EGPP server, due payment will be disbursed into beneficiaries’ accounts on time. Mobile Supervisor (FS) will be provided with a java-enabled cell phone. FS asks for PIN in random order of the listed beneficiaries in that particular worksite. If the entered PIN matches, attendance of the beneficiary will be recorded in the central server connected through MNO network. Mobile Based Option 1 or 2 Option 4a Option 1 Option 1 Beneficiaries will go to nearby post office branch and swipe postal cash card and enter PIN to withdraw cash. Based on the attendance report of EGPP server, due payment will be disbursed to beneficiaries’ accounts before hand. Each beneficiary will be given a 3-digit PIN in English and FS will have a POS machine. Beneficiary will swipe the PCC at the POS machine and enter their PIN when prompted to provide attendance. Card Based

20. Lessons Learned (to date) • Locally designed/available solutions work best • It is better in the long run to select solutions that are locally designed and readily available than those that are foreign, even if they happen to be more elegant options. • Change management requires a lot of effort • Especially for programs that deal with local government bodies and less-educated beneficiaries, change management activities need to be well thought out and allowed a lot of time. • Proper value articulation can overcome intrinsic hurdles • Once people understand how a new solution helps them directly (reduced processing time, greater transparency, etc.), they will put in the effort to learn the new solution more proactively.

21. THANK YOU For more information, please contact: pial.islam@pistrategy.org