I have just finished a case study on the use of smartcards to disburse NREGA wages in Andhra Pradesh. You can find the full report here. For all those who may not have the time to read the full report, here is a very brief recap of the main results:- The smartcard payment scheme made it more convenient for workers to receive their wages: the wages were delivered more quickly; they travelled less distance to collect their wages; and they spent less time waiting in line at the processing point versus other payment methods
- By collecting the fingerprints of beneficiaries during enrolment, the payment scheme significantly reduced the number of fraudulent (duplicate or non-existent) beneficiaries
- There is significant potential for the smartcards to be used as a tool for delivery of other government benefits and financial services though there are also significant hurdles that must be overcome before this will happen.
I know what you're thinking: this is just another one-off example of well intentioned but misguided technophiles straying too far into the development space and is unlikely to continue functioning for more a year or so and even less likely to be replicated. If that's what you're thinking in this case you'd be wrong. The smartcard payment system which we studied for the report not only led to increased convenience for the end user and reduced leakage for the government, but also appears to be profitable for the technology company leading the project (FINO) as well. In fact, I predict that the use of biometric payment systems to deliver NREGA wages and other government benefits which involve direct cash payments to beneficiaries (e.g. – Indira Awas Yojana, the National Old Age Pension, the new Dhan Laxmi scheme, etc.) which grow exponentially in coming years. Indeed, in the short time since the publication of the report, I have heard anecdotal accounts of several other states which are seeking to experiment with biometric payment systems for delivery of government benefits and technology companies which are seeking to develop biometric payment solutions.
2 comments:
This is really interesting and a clearly has potential for upscaling. What are the costs of introducing such technology all over the country? Are there other costs involved? Seen in conjunction with a proper audit system (social or otherwise), this can clean up the payment system quite a bit.
Have you also come across interesting approaches towards making sure everyone knows about the rights and provisions of the scheme? I mean, instances of steps that can be taken to clean up the initial stages of the process, including enrollment, demanding work, allocation of work etc...
I read Doug Johnson's case study on the use of Smart Cards to deliver govt. benefits in AP, and I found it a very useful paper with clarity on issues discussed in understanding the use of biometric/smart cards for financial inclusion. I did not in my limited understanding of technology envision it to be used in a manner to benefit the poor till i read his paper, thanks to Deepti posting me the papers. I would like to understand/know more about other similar experiences/experiments by bankers. I have heard about an experiment by Union Bank of India in Bombay but do not have access to any published information about it. I would appreciate if i could have information to access material on 'use of technology for the poor'. ManiNandhi, Jesus and Mary College, Delhi University.
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