How Nagad is ‘redefining’ government disbursements
In the past, the distribution of social safety net allowances and education stipends was plagued by irregularities, with fake beneficiaries, nepotism, and inclusion of ineligible individuals, while deserving recipients were left out.
The mobile financial services (MFS) provider Nagad claims that the situation has significantly improved since it digitized the entire disbursement system and established transparency.
In 2021 and 2022, Nagad successfully disbursed 75% of social safety net allowances, including those for the elderly, widows, underprivileged individuals with special needs, and students with special needs.
According to Nagad, the government was obliged to cease primary stipend disbursements for a year prior to their agreement with the Directorate of Primary Education (DPE) on December 13, 2020, due to anomalies and a lack of transparency in the preceding distribution system.
Nonetheless, during the fiscal year 2021-22, Nagad effectively dispensed stipends to over 1.25 crore primary school students with transparency and accuracy, relieving guardians of countless difficulties.
Nagad registered students on their digital platform using information from their birth certificates and mobile phone numbers, as well as the NIDs of their guardians, ensuring that once the stipends were disbursed, guardians received the funds instantly with cash-out charges to their Nagad accounts.
Previously, the government used the government-to-person (G2P) payment system issued by the Ministry of Finance to distribute primary education stipends.
Read more: Nagad Announces Free Cash Withdrawals for Customers
Now, there is coordination between the Finance Division’s G2P system and the DPE’s integrated digital system for the stipend payout.
The primary stipend program was introduced in 1999 to prevent school dropouts and keep female students in classes.
Currently, the government disburses stipends to 1.4 crore schoolchildren across the country.
Nagad, Chief Commercial Officer, Md Shihab Uddin Chowdhury said that they have digitalized the disbursement of social protection allowances and stipends and ensured transparency, putting an end to all the irregularities that prevailed until they took charge.
Under Nagad’s system, each pre-primary student now receives Tk75 in stipend per month, first to fifth graders receive Tk150 each, and sixth to eighth graders receive Tk200, with two children from the same family receiving Tk300 and Tk400 per month, respectively.
