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The Private Sector and Cash Transfers in Africa

There is growing emphasis on the role played by the private sector in alleviating poverty in Africa. At the same time, greater focus is being placed on cash transfers as a poverty alleviation tool. This paper provides an economic rationale for private sector involvement in the provision of cash transfers. Previous research has focused on how the financial sector can provide payment solutions. In addition to payment mechanisms, the paper examines other avenues through which the private sector can contribute to cash transfer programmes .business taxes and Corporate Social Responsibility (CSR). Reducing corruption in tax administration and an enabling investment climate are essential if business taxes are to be a sustainable financing source for cash transfers. Governments can incorporate CSR into national policies and strategies which identify cash transfers as a poverty alleviation instrument. Cell phone banking, mobile branches, Point of sale (POS) technology and low cost banking are increasing access to financial services by the poor. These financial innovations can be used to make cash transfer payments.

Working Paper 080
1 May 2008
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20 September 2012
Publication Type: Working Paper

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