Models of Social Payments through Inua Jamii

Kenya moved towards electronic payments of social benefits in 2013. In 2018 the payments system for its premier social protection program, Inua Jamii, was restructured to offer most, but not all, beneficiaries a choice between several payment service providers (PSPs), all commercial banks. This study surveys the payment system from the perspective of recipients, including their views on convenience and the benefits from competition. It also considers whether these digital G2P payments programs have increased financial inclusion more generally – recognizing that this was already high in Kenya due to the market penetration of M-Pesa digital wallets. It finds strong support for making payments through financial accounts. The overwhelming majority of respondents consider this to be a good system, with some favoring the commercial bank channel and others expressing a preference for direct payments through wallets. There is strong support for offering choice where this is feasible, but we find that the single payer G2P model can also be effective depending on local conditions. While social transfers may have enabled poor people to afford cell phones and mobile money accounts, the system can be developed further to enhance financial services access.