Towards Cashless Government Transfers: Evidence from Ingreso Solidario in Colombia

Last registered on January 02, 2023
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Pre-Trial

Trial Information

General Information

Title
Towards Cashless Government Transfers: Evidence from Ingreso Solidario in Colombia
RCT ID
AEARCTR-0006976
Initial registration date
December 28, 2020

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
January 04, 2021, 9:15 AM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
January 02, 2023, 7:42 PM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
Colombia
Region
Latin America

Primary Investigator

Name
Bridget Hoffmann
Affiliation
Inter-American Development Bank
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Other Primary Investigator(s)

PI Name
Diego Vera-Cossio
PI Affiliation
Inter-American Development Bank
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PI Name
Camilo Pecha Garzon
PI Affiliation
Department of National Planning Colombia
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PI Name
Karla Hernandez
PI Affiliation
University of Wisconsin-Madison
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Additional Trial Information

Status
Completed
Start date
2021-01-15
End date
2022-12-31
Keywords
Finance & Microfinance, Welfare
Additional Keywords
Financial Inclusion, FinTech, Cash Transfer, Financial Literacy, Digital Payments, Savings, Inter-Household Transfers
JEL code(s)
G510; G530; I380; D12; O12; C93
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
In response to the broad and devastating economic impacts of the Covid-19 pandemic on households, the national government of Colombia developed and implemented a new cash transfer program, Ingreso Solidario, to provide assistance to vulnerable households that were not beneficiaries of any program in the Colombian safety net. To lower transaction costs and avoid personal contact that could contribute to the spread of the coronavirus, the government is turning to mobile money or electronic transfers to bank accounts or digital wallets as safe, secure, and efficient modes of payment. In addition to these logistical benefits and lower transaction costs, the large-scale usage of digital modes of delivering cash transfers may lead to benefits for households. Many households without prior access to a formal financial institution will be introduced to formal digital payments and interact with a formal financial institution for the first time.

We will use a randomized encouragement design to study the impact of financial inclusion through simplified digital accounts on households’ financial outcomes, formal employment, and usage of health services using a combination of administrative records and survey data. In particular, our intervention will provide information on the benefits of digital accounts, step-by-step assistance in opening accounts, and basic training on the primary features of the digital platforms. We will identify the impact of opening simplified digital financial accounts and using them to digitally receive cash transfers on households’ savings, consumption, mode of spending, inter-household transfers, and use of formal financial products, as well as on formal employment and usage of health services. To quantify the short-term effects of transitioning from cash payments to direct deposit into digital accounts, we will analyze data while study participants are still recipients of program transfers. To analyze whether the transition has long lasting effects, we will measure outcomes after the emergency cash-assistance program is discontinued in June 2021.
External Link(s)

Registration Citation

Citation
Hernandez, Karla et al. 2023. "Towards Cashless Government Transfers: Evidence from Ingreso Solidario in Colombia." AEA RCT Registry. January 02. https://doi.org/10.1257/rct.6976-2.0
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Experimental Details

Interventions

Intervention(s)
The intervention is encouragement and assistance in navigating the process of opening a digital financial account for the purpose of switching from cash payment to digital payment of Ingreso Solidario transfers. The intervention also includes assistance with the basic features of the digital platforms.

The intervention is implemented through SMS messages and telephone calls from a call center. The telephone calls explain the features of digital accounts and the benefits of receiving Ingreso Solidario payments digitally. During this call, participants are offered step-by-step assistance in selecting a digital account (digital wallet or simplified savings account) and opening the account. A second call to participants who opened new digital accounts will provide assistance with the primary features of the digital accounts. SMS messages will be sent to participants to give them prior notice of the initial call and to remind participants where they can find additional information about receiving Ingreso Solidario payments digitally. Participants that successfully create accounts will be automatically registered for receiving payments in their account during the call or after they call back to the call center to provide notice of the opening of their account.
Intervention Start Date
2021-01-18
Intervention End Date
2021-04-30

Primary Outcomes

Primary Outcomes (end points)
Mode of payment for cash transfer (cash or digital), usage of FinTech products and financial products from formal financial institutions, mode of spending, inter-household transfers, consumption patterns, savings, and financial literacy
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Formal employment, health services usage
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We will implement a randomized encouragement design. The study sample consists of 30,000 households that are randomly assigned to the treatment or control group in equal proportions. We will analyze outcomes in administrative records (mode of payment, ownership of formal financial products, formal employment, and usage of health services) using this study sample of 30,000 households. We plan to conduct households surveys using a sample of 5,000 of the 30,000 households, approximate equally split between treatment and control groups, that will allow us to examine additional outcomes of interest.

The study sample is randomly drawn from a target population that consists of households that are eligible for Ingreso Solidario, that were not located at the beginning of the program but were located months later, and that did not have a bank account (either traditional or digital accounts) when they received their first program payment. These households did not receive their first five monthly transfers from Ingreso Solidario because they could not be reached. After extensive outreach, over 100,000 of these unbanked households were located and received their first transfer, a bulk payment in arrears, in cash in September 2020. Starting in October 2020, these households received their regular monthly payments and monthly payments could be through digital modes.

Control: no intervention
Treatment: Encouragement intervention
Experimental Design Details
Randomization Method
Randomization done in office by computer
Randomization Unit
Household
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
Study sample size: 30,000
Survey sample size: 5,000
Sample size: planned number of observations
Study sample size: 30,000 Survey sample size: 5,000
Sample size (or number of clusters) by treatment arms
Study sample size:
Control: 15,000
Treatment 15,000

Survey Sample Sizes:
Control: 2,500
Treatment: 2,500
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Innovations for Poverty Action IRB
IRB Approval Date
2020-12-20
IRB Approval Number
15755
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials