Delivering on the potential of digitized G2P: Driving women’s financial inclusion and empowerment through Indonesia’s Program Keluarga Harapan (PKH)

In the last few months, nearly every country in the world has announced some sort of G2P payment scheme. The World Bank’s Global Findex reported two years ago that if governments moved cash payments to digital channels, they could help up to 100 million unbanked adults open up their first account. Now, with social distancing and widespread lockdowns, opening bank accounts to ensure these payments get to  beneficiaries safely has become a priority for many countries. In fact, this moment in history is one in which G2P, when well-designed, can do more than facilitate immediate crisis response; they can promote long-term women’s economic empowerment through financial inclusion.

Just three years ago, Indonesia’s primary social benefits program, Program Keluarga Harapan (PKH), shifted its payment channels from cash to bank accounts for its nearly 10 million beneficiaries. For most of  these recipients, the account was their first owned product with a formal financial services provider. This engagement, however, has yet to translate into active use of accounts.

This research examines what influences beneficiaries’ use of accounts in this flagship program through a mixed-methods analysis of a nearly 2,000-person survey and robust qualitative research. The distribution of our sample across these segments underscores a significant opportunity to leverage the accounts for financial inclusion to further women’s economic empowerment. There is evidence that if PKH beneficiaries were to receive the right information and have greater financial capability, a larger proportion of them would save, make payments, transfer funds, and borrow against their balance.

Themes: Beneficiary Identification, Targeting, Onboarding, Digital Payment Ecosystems, Financial Inclusion, Women’s Empowerment