The good news is that the country is seeing an increased focus on livelihoods, social protection and financial inclusion as a means to address poverty. A joint project by the World Bank and IFC, the World Bank’s private sector arm, is helping to support and expand social protection in Cote d’Ivoire.
We sat down with Heba Elgazzar, project lead, to talk about innovative approaches in delivering the project, the persistence and patience required to cultivate a strong public-private partnership and the importance of client-focused solutions to achieve greater impact.
Q. I understand that your approach for increasing social protection coverage, livelihoods and financial inclusion amongst the poorest in Côte d’Ivoire, is quite unique. Can you tell us about the innovative aspects of this project and some of its accomplishments?
A. When it comes to our work in Côte d’Ivoire, I’ll begin by saying that the many years of destructive civil conflict, worsening employment prospects, and increasing poverty had hampered whatever social protection existed. In fact, large parts of the population were excluded from all social benefits, with perhaps school feeding programs being the only exception.
There was a major challenge to delivering benefits and social services to the poor, as well as employment support. A vast majority of households living in rural areas have not been identified and were excluded from social protection coverage.
The urgency of finding new ways of expanding social protection was clear and thanks to funding from the Rapid Social Response multi-donor trust fund (RSR), we - a team consisting of the World Bank’s Social Protection and Jobs Global Practice and the IFC - could launch the project. We leveraged core expertise from across disciplines and identified solutions that were then iterated with the government to ensure that a tailor-made approach for the local context was chosen.
For the first time in Côte d’Ivoire, vulnerable households can and have received cash transfers from the government through mobile money technology. Beneficiaries also include local cooperatives who have started to leverage the technology for improving livelihoods.
We helped improve and leverage the country’s digital foundation to deliver social benefits - in the form of cash transfers - to even the most remote households. This also meant that we for the first time could identify people that had previously been completely invisible in the social protection and labor system. Through a public-private partnership we worked with mobile money operators to first find a way to provide these vulnerable households with mobile accounts. Once the households had been identified and the mobile accounts set up – it also became a form of identification.
We then set up a routine schedule for transferring social benefits to areas that are very difficult for social workers to reach – and thereby circumventing significant infrastructural weaknesses due to the long conflict, while ensuring financial inclusion and the redistribution of economic wealth to the most vulnerable.
The approach represents a significant innovation for government-to-person payments in Côte d’Ivoire.
Just during the very first phases of the program, a vast number of people in remote areas have been reached - some 210,000 individuals from poor households (35,000 previously unreached households) - have benefitted from mobile money accounts and digital cash payments.
In addition, approximately 600,000 individuals (nearly 100,000 households) are now registered with the social registry system.
I should also mention that the project has helped open up new markets. Cote d’Ivoire’s telecommunications network is rapidly expanding, becoming one of the fastest growing digital finance markets in the world.
Q. Did digital payments help reduce transaction costs?
A. A shift to digital payments can help reduce transaction costs by improving transparency and reducing leakage while opening the door for vulnerable households to benefit from access to the financial system.
With regards to financial savings, the fee that the mobile money operators charges is around 1% (at the most 3%) of the cash transfer payment itself. Whether hiring a secure financial agent to deliver cash transfers to the beneficiaries, or opening new bank branches - the labor, transportation and additional security will likely lead to more than the 1% charge by providers. Moreover, recipients of cash payments in rural areas often have to travel considerable distances to designated locations, incurring high travel costs.
Another factor where we have made substantive savings for both beneficiaries and providers is time spent in administering these transactions.
More importantly, many families in Cote d’Ivoire get around on foot and can be vulnerable to street crime and theft when picking up regular cash payments. By using digital payments these risks and costs associated with potential crime can be reduced.
Q. Have you noticed whether digitization has had a particular impact on women?
A. Digital payments can be leverage to introduce workers to the formal economy and help increase women’s economic empowerment. We know that it can help women gain greater control over household incomes, and budget decisions. In many cases, it’s the first account that a woman has in her own name and it can be a critical first step for an entrepreneur and perhaps lead to the formalization of her small business.
We have observed that women are increasingly becoming active in terms of farming and income generating activities - specifically in the cooperatives where their involvement and level of activity has increased notably.
Secondly, we have seen an early effect where financial savings were driven by women in the households. Through the data we collected from mobile providers, we learnt that women have taken on a prominent role in setting aside finances for savings.
Third, with the digitization, there has been an uptake in the request for birth certificates and identification for children with understanding that mothers typically drive these requests.
Q. How did this project help lay the foundation for an effective public-private partnership?
A. When it came to our work with the private sector and developing a contract between the mobile money operators and public entities, I can say that it was initially far from easy. It required persistence and patience as this is the first public-private partnership. We therefore had to begin by cultivating a trusted relationship between the two sectors.
The Government of Cote d’Ivoire did not have a system set up for contracting out services –especially not for social safety net services – and it took a lot of work, time and patience to ensure that the contract was set-up correctly and that it was working well. But the time spent upfront was well worth it.
We also developed a framework for mobile operators to ensure reliability and follow-through. A novel system was established, which ensured that the mobile operators collected additional behavioral data and information that can help us better understand the behavioral dimensions of the project.
Mobile operators provided beneficiaries and households with free handheld phones. Mobile phone companies benefitted by acquiring new customers who will likely be tapping into additional digital financial services down the road.
In short, a whole new market opened up for the private sector.
At the same time, the government of Cote d’Ivoire is now able to monitor and reach its citizens, increasing transparency and leading to cost savings.
The government is currently scaling up to include additional households and will be working with the same mobile providers, continuing the positive public-private partnership.
Q. One of the positive impact was that beneficiaries spontaneously began organizing themselves in cooperatives to improve their livelihoods - can you tell us more?
A. What we saw very soon after digitization is that small-scale farmers are coming together and spontaneously organizing themselves in local cooperatives. Farmers who had not previously been organized in groups suddenly showed a disposition to working together. Needless to say, being able to communicate more efficiently and openly with each other through mobile phones facilitated the formation of new (mainly) agricultural cooperatives.