A field experiment on mobile cash transfers to vulnerable populations in Bangladesh

Principal Investigators: Giorgia Barboni, Dr. Abu Sonchoy, Parul Agarwal
Research Team: Sitaram Mukherjee
LEAD Centre: Centre for Microfinance (CMF)
Focus Area: Financial Inclusion
Project Geography: Northern Bangladesh
Partner: BRAC Institute of Governance & Development (BIGD)
Status: Ongoing


The northern parts of Bangladesh are vulnerable to frequent natural disasters, such as seasonal famines (‘monga’) and periodic floods that have implications on income uncertainty and internal migration of households. The Bangladesh government has implemented a series of interventions to promote food security, employment and better health conditions to mitigate the adverse effects of these disasters. These cash transfers are an important component of social protection and poverty reduction strategies and have traditionally been provided in the form of physical cash, accompanied by in-kind support such as food and shelter. The rapid rise of mobile money in Bangladesh provides an opportunity to implement cash transfers via mobile money, which can reduce the time and costs involved in disbursing relief, as well as mitigate the risks of loss, theft and leakages. Capitalizing on the increasing use of mobile money, this project tackles the challenges faced in implementing cash transfers while providing emergency relief from natural disaster. Researchers aim to study the effectiveness of using a mobile money service to implement the cash transfers in north Bangladesh.

Feasibility Study

A feasibility assessment was conducted in October and November 2015 in the district of Gaibandha, in Northwestern Bangladesh in order to assess the socio-economic profile of the target population, their level of financial inclusion, their demand for a mobile money product ‘bKash’ (and for mobile cash transfers), as well as mobile phone ownership. In addition, qualitative interviews were conducted with the partner NGO to understand challenges faced by households during monga and floods, and the various types of interventions to address these challenges. Similar discussions were conducted with bKash agents to understand the challenges they face as access points during natural calamities, their perception about customers’ demand for bKash and their trust in the product. Results from the feasibility assessment show that the population in study areas is exposed to floods and to a variety of shocks throughout the year, including illnesses and crop losses. The coping strategies adopted by respondents against these shocks appear limited and far from effective. Government transfers (delivered either through NGOs or Union Parishad) reach a small share of this population. Consequently, households rely on aid from friends and family to mitigate these shocks, and also report a significant decline in consumption during times of distress. However, high mobile phone penetration and awareness regarding mobile money suggest that a service such as bKash has the potential to reach a significant share of the population during natural catastrophes.

Experimental Evaluation

Based on the results of the feasibility study, we plan to implement an experimental evaluation of the program in 2017. A Randomized Control Trial design will allow us to assess the impact of the mobile cash transfer program on recipients’ consumption, expenditures and health outcomes, and their ability to cope with present and future shocks, by comparing it with traditional physical cash transfers. In addition, our study will capture the linkages between the usage of mobile money and subjects’ awareness of financial inclusion and, increase in mobilization of savings. We plan to test this hypothesis with an ad-hoc treatment.

Related Resources
FACT SHEET: Natural Calamities and Social Security Net Programs
REPORT: Natural calamities and social safety net programs: A feasibility assessment of the impact of mobile cash transfers to vulnerable populations in Bangladesh