In this research, Guy Stuart, CFI Fellow and Executive Director of Microfinance Opportunities, assesses whether and how G2P payments increase formal financial inclusion. Stuart coupled observations, interviews and focus groups in Colombia and Pakistan with extensive analysis of reports on G2P payments covering 19 countries and quantitative data from the World Bank Global Findex.
While Stuart’s research identifies five key mechanisms by which G2P payments could lead to greater financial inclusion, the evidence ultimately suggests that G2P beneficiaries do not take advantage of the basic and common functionality of these programs.
Stuart provides insightful recommendations for government and the private sector to design better products, optimize delivery of payments, and effectively communicate the advantages of these programs to beneficiaries.