Attachments
EXECUTIVE SUMMARY
OBJECTIVES AND PURPOSE
The feasibility study's purpose is to evaluate and pinpoint potential payment options for delivering cash assistance to beneficiaries in Tajikistan in both humanitarian and development contexts. The focus of the study is ensuring efficient, accountable, secure, scalable and cost-effective delivery, especially in emergencies and rural areas. The analysis adapts the Inter-Agency Social Protection Assessment (ISPA) framework to meet the expectations of Cash Working Group (CwG) actors, emphasizing the interplay between the enabling environment, programmatic needs and payment delivery mechanisms. Each payment modality is examined for its strengths, weaknesses, and feasibility within the context of Tajikistan, with particular attention to rural, remote, and vulnerable populations. The study also proposes actionable recommendations for developing effective payment options in Tajikistan that promote financial inclusion, cost efficiency, and improved cash delivery.
SUPPORTING ENVIRONMENT AND OVERVIEW OF THE PROGRAMMATIC REQUIREMENTS
The financial sector in Tajikistan comprises 64 FSPs competing for a substantial untapped customer base that does not currently utilize financial services. The access to digital financial services remains uneven, with rural areas facing limited access points and insufficient networks of ATMs, PoS terminals, and banking agents. Financial inclusion indicators are among the lowest in Europe and Central Asia, as the economy remains predominantly cash-based, with 90% of transactions in 2022. However, digital payments and transactions have grown rapidly in recent years, driven by government proactive policies aimed at simplifying and broadening access to digital financial services.
The regulatory framework, governed by the National Bank of Tajikistan (NBT), restricts financial services to financial service providers (FSP), excluding mobile network operators. Proactive policies towards simplification and increasing access to digital payments had noticeable effects, including the introduction of new financial products, simplified know-your-customer (KYC) verification procedures, and the regulation of retail-agent banking. However, some requirements, such as physical KYC verification for key payment delivery mechanisms, continue to hamper accessibility to remote and most vulnerable segments of the population.
Challenges in telecommunication infrastructure further constrain access to digital financial services. As of early 2023, 60% of the population remains offline, with limited internet penetration, high costs, frequent power outages, and pronounced regional disparities, especially in rural and remote areas.
While the current most important programmatic caseload is focused on resilience building, there is a strong focus from the different humanitarian and development agencies on using cash assistance in responding to natural disasters of different scales and potential conflicts. Opportunities to integrate humanitarian and social protection were identified, though significant gaps remain.