Delivery mechanisms of cash transfer programs to the poor in Bangladesh

Shaikh Shamsuddin Ahmed

No 32751, The Social Policy and Labor Discussion Paper Series from The World Bank

Abstract: This study carries out an analysis of the practical issues and the financial costs relative to the transfer of cash benefits from source to recipients and the cost effective way of transferring funds to the beneficiaries. The study analyzes and compares three alternative delivery mechanisms: The Income Generation Vulnerable Group Development (IGVGD), the Primary Education Stipend Program (PESP) and the Rural Maintenance Program (RMP). This study also looks into targeting and leakage issues that affect delivery mechanism. A field level survey has been conducted to assess beneficiaries view on the existing delivery mechanism and on the prospect of using technologically advanced alternative delivery mechanisms in the rural setup. This study reveals that the potential of using rural bank branches to deliver cash benefits is not fully utilized. Introducing advanced technology to rural banks for improving the efficiency of delivery of benefits is viable, subject to cost and capacity constraints. At the same time, reducing targeting failure and leakages can further enhance delivery efficiency. This study also shows that there are too many unnecessary agents at various levels of delivery and points to the need for appropriate delivery supervision.

Date: 2005-05-01
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