The COVID-19 pandemic had a severe impact on the lives and economic situation of farmers, migrant laborers, and workers, refugees etc., as a result of displacement and sudden lockdowns. Equipped with negligible resources, such citizens of most countries were in dire need of economic subsidies.
The government across nations decided to step up and help the displaced migrants and marginalized workers financially by distributing either bulk payments of cash or vouchers as subsidy distribution to sustain their livelihood. G2P monetary transfers were the most popular choice, accounting for about 51% of all social measures planned and/or implemented.
Alongside, the global organizations stepped up too by sending large aids to the NGOs like Danish Refugee Council (DRC), ACTED, CONCERN, Norwegian Refugee Council (NRC) etc. Those aids can be varied in the range of USD 0.5Mn to USD 20Mn based on the size of the country, the geography of the country, and the displaced population.
Need For Digitization of Government Subsidy Distribution
The overall goal of NGOs is to provide assistance using the most advanced technology and delivery mechanisms while taking into account the specific constraints in each area of intervention and the specific objectives of each sector of intervention; it also intends to give beneficiaries the choice and flexibility to use cash according to their needs. This will cover different program sectors: Economic Recovery (Food security and Livelihood), Protection, Education, NFI, Shelter, WASH as well as multipurpose cash assistance. As per research, since May 2020, 190 countries/territories have planned, launched, or modified their social protection safety net programs, often cash-based, to battle the economic impact of the pandemic.
This creates an opportunity for financial service providers and platform solution providers to collaborate and provide both the platform and distribution of cash and vouchers across the assigned territory through digitized methods.
Every country must chart its own course to develop a digital system that improves G2P payments' efficiency, accuracy, and speed. Each path is determined by the country's existing circumstances, goals, budgets, legal and regulatory constraints, and a variety of other factors. The process requires certain stakeholders to take care of their key responsibilities in order to make sure that the execution of the G2P e-distribution platform is smooth and effective. The below image briefly describes the key features and roles of participants while developing a G2P e-distribution platform.
Primary Benefits of using Electronic Subsidy Distribution Channels:
- As the subsidy is distributed digitally, there is a guarantee that it will reach the last mile.
- Quick subsidy distribution: In less than a month, roughly USD 10 million in subsidies can be provided digitally to migrants, laborers and other marginalized workers, whereas manual distribution would take at least a year.
- Subsidy providers like WHO, ILO, DRC etc. will be assured that subsidy is distributed to end mile digitally through service providers agent network with no red-tapism.
- Win-win approach for subsidy providers, service providers as well as platform providers.
COVID-19: Digitize & Fast Track Your Social Assistance Payments
During the COVID-19 pandemic, digital subsidy distribution accelerated, providing potential for digital service providers and platform service providers to combine and deliver an end-to-end distribution of subsidies to migrants, laborers, and other marginalized workers in record time, with no bribery, misuse, or red tape.
Panamax's MobiFin Subsidy Distribution system enables governments and NGOs to make direct bulk payments to citizens' bank accounts for subsidies and other payments. The technology ensures that all schemes and benefits are delivered in real-time to the intended recipients. The solution can be a great choice for governments to deliver subsidies smoothly and efficiently in the times of COVID-19 as it specializes in managing a large number of direct bank transfers in a short amount of time.
Contributing Writer: Harshita is a Content Writer at Panamax, Inc. Having pursued MBA in HR and Marketing, she found her calling in Content Writing. She has explored writing in different styles of content including coffee table books, website content, blogs, newsletters, e-books, and media. In her time of leisure, she finds happiness in binge-watching classics and practicing yoga.