Impact Report: Leveraging Digital Platforms and Human Networks for Unconditional Cash Transfer

The COVID-19 pandemic has been an unprecedented crisis in recent human history directly affecting the health, well-being, and livelihood of millions of people. Informal sector workers, small businesses, and migrant workers are among the hardest hit by the pandemic. In India, by January 2021, over 10 million people had been infected by the disease. The Government of India had to announce a full lockdown on 24 March 2020 and extend it four times till 31 May to contain the spread of the virus and to reduce morbidity and mortality. However, the lockdowns affected the livelihood of the people severely. By the first phase of the lockdown, the unemployment rate rose to 23.52% in April 2020. The pandemic and the subsequent long-term effect of the lockdown have disproportionately affected low-income households, affecting their health, livelihoods, access to education, and food security. Without the means to offset these incidents immediately, a sizable population could slip back into poverty.

To help the affected population in large-scale emergencies, Unconditional Cash Transfers (UCT) is an impactful strategy in which cash is given to those most affected without any strings attached. Poor households can use the money to meet their specific needs. India has the digital infrastructure to operationalize UCTs, but the key challenge lies in identifying the most vulnerable beneficiaries. To address this challenge, Grameen Foundation India used its existing network of last-mile agents, Grameen Mittras, and an end-to-end technology solution, Grameen4Giving, to identify the most deserving people in Nawada district in Bihar and Bhandara and Nagpur in Maharashtra for the UCTs. Once GFI identified the beneficiaries, it transferred INR 4,500 to the bank account of each beneficiary. GFI then got back to the beneficiaries to understand their experience and usage of the UCTs.

GFI used a multi-stage process to identify those who deserved the UCTs most. This began with a Participatory Wealth Ranking exercise in the communities to identify the poorest households. GFI then took these candidates on board the Grameen4Giving platform, which assessed the vulnerability of the beneficiary in real-time and shortlisted the candidates. Finally, the project committee reviewed the cases ruled as ineligible during the selection process so that no deserving household is excluded.

GFI then credited UCTs to the 1,225 vulnerable households selected across Nawada, Bhandara, and Nagpur. Women made up 71% of the total beneficiaries. Marginalized communities such as scheduled castes and tribes accounted for about 40% of the beneficiaries and Other Backward Classes for 44%. This caste distribution among beneficiaries is testimony to caste-based marginalization even in modern times.

GFI found that 35% of the total beneficiaries were living below the national poverty line, and 71% were below the $4 poverty line. The feedback showed that 61% of the UCT beneficiaries were food insecure. UCTs for these beneficiaries would have certainly helped them in meeting their immediate needs. GFI found that a migrant worker was the key income source in 92% of the beneficiary households and these migrant workers lost their livelihood because of the lockdowns.

GFI stumbled upon a harsh tradition in its chosen districts: widows were forced to live alone in a separate house. A widow beneficiary in Bhandara revealed while being taken on board that she has no one to look after her. The project committee reviewed the case of these widows and ensured that they got the UCT.

GFI helped 98% of the beneficiaries open a bank account, with a third of the accounts under the PMJDY, setting an example in financial inclusion. People with bank accounts find that access to government schemes is easier.

How do beneficiaries spend the money? A GFI survey found that, in about 67% of the households, the beneficiary sought the advice of and discussed with someone in the family or someone outside the family. In 49% of the recipient households, women members decided how to spend the money. Since the UCT was targeted at low-income households, it was not surprising to find that 94% of the households used the funds for purchasing groceries. In short, the priority was food security.

The Grameen-MetLife UCT program had a significant impact on the lives of the beneficiaries even though the outreach and the scale were limited by the availability of funds. The Grameen Mittra model is now in a position to leverage the goodwill generated to deepen financial inclusion in the communities. We learned from this program that psychological counseling to reduce mental stress should be incorporated, and gender dialogues should be integrated to minimize arguments over the use of the funds.

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