Bilal Siddiqi, CEGA, Berkeley
Abstract: Many countries target low-income women for cash transfer programs but struggle to ensure that female beneficiaries personally receive and retain control over these funds. Biometric verification may address this issue by requiring beneficiaries to personally withdraw funds after authenticating their fingerprints. While this may reduce unauthorized withdrawals and capture of funds by other household members, it may also increase time and money costs of withdrawal and cause unintended exclusion of eligible beneficiaries. We exploit the staggered rollout of biometric identity verification in Pakistan’s Benazir Income Support Programme to assess its impact on the delivery of cash to low-income women. We find that biometric verification increases women’s control over how to spend the cash. However, we also find an increase in reports of side payments paid involuntarily to access the cash transfer, and a decline in beneficiary satisfaction with the payment system. After accounting for the increase in side payments, we find that biometric verification has no statistically detectable impact on the net amount received by female beneficiaries. We explore mechanisms for the effects including mobility constraints faced by female beneficiaries and market power of payment agents.