Six Big Ideas: How Financial Services Can Improve Social Protection Delivery

Executive Summary

Social protection is essential to help individuals and families meet basic needs. In fragile contexts, these systems are even more important. Countries experiencing high or extreme fragility host 72 percent of the world’s extreme poor (OECD 2025). These same countries also face the highest exposure to compound risks—from climate shocks to conflict—requiring adaptive systems to meet the changing needs of communities.

Cash transfers have proven among the most effective social protection tools. Yet delivering cash transfers in fragile contexts is uniquely challenging. Recurring crises interrupt financial sector development efforts, public sector capacity is often constrained, and financial service providers struggle to reach remote communities.

While other countries have built sophisticated systems for the efficient delivery of government payments, fragile contexts face barriers to achieving similar gains. Coordination between social protection and humanitarian cash transfers—which reached USD 7.9 billion in 2022 (CaLP 2023)—also remains limited, creating parallel systems that increase cost and complexity for both programs and recipients.  

This Focus Note offers six ‘big ideas’ for how funders of social protection programs can improve delivery of cash transfers in fragile contexts. Leveraging the financial sector for cash transfers improves outcomes for both programs and recipients. This allows faster, safer, and more cost-efficient transfers, enhances transparency and accountability, and improves communication and grievance redressal for recipients.  

Leveraging the financial sector also opens the door for low-income individuals to access and use a suite of financial products, such as savings, credit, insurance, and payments, helping them manage risk and improve resilience to future shocks. Drawing on emerging evidence from highly fragile contexts, the paper presents ways that social protection funders, through governments and implementing partners, can invest to achieve these gains.  

For improving the shared infrastructure supporting cash transfers:  

• Support more open government systems to improve efficiency at scale. In contexts where government payments lack scale or where humanitarians play a large role, funders should support systems that encourage humanitarian organizations to coordinate with government on the delivery of cash transfers, while maintaining independent program design. Open systems help reach scale faster, decreasing costs and increasing efficiency.  
• Seed civic tech champions to help build local delivery capacity. In contexts where government capacity is severely constrained, funders can provide early-stage support to local civic technology champions to help develop the infrastructure necessary for effective cash transfers. Civic champions can help kickstart capacity development and accelerate progress toward local, sustainable, and government-owned delivery systems.  
• Invest early in the building blocks of future government delivery systems. In contexts where political or security conditions prevent direct support to government, funders should support local solutions outside government, such as shared humanitarian solutions for managing cash transfers, with the potential to build toward national systems. Supporting the building blocks of future systems can help fast-track the creation of government delivery systems.

For improving delivery of cash transfers at the last mile:

• Support private sector investment in financial access points for hard-to-reach areas. In contexts where financial sector investment is absent in rural areas, funders can co-finance or help de-risk the expansion of financial access points. These approaches help catalyze private sector investment and build sustained financial access while meeting immediate needs for disbursing cash transfers.
• Create pathways for better leveraging informal money transfers. Funders should take steps to help promote the safe and efficient use of informal money transfer services for cash trusted by recipients. This may include supporting formalization efforts, or helping coordinate funder due diligence. Better incorporating informal services can build on existing trust to reach recipients where other financial institutions are absent.
• Support community engagement in delivery. In contexts where government presence is limited but community and social capital is strong, funders should invest in locally embedded models such as training community members as banking agents, for example, India’s Bank Sakhi program. Community-level engagement helps enable access to cash transfers while supporting community structures that can help build longer-term resilience.

These ideas offer practical starting points for funders seeking to strengthen social protection payment delivery systems in the most difficult contexts.

Applying these localized approaches can help improve outcomes for cash transfer programs while also supporting the longer-term resilience of recipients.