Bridging technology and efficiency in social protection: cost implications of digital cash transfers in Tanzania

This study explores the cost implications of digital versus traditional cash delivery in Tanzania’s Productive Social Safety Net (PSSN) programme, focusing on Iringa District. Using survey data from 385 beneficiaries and a Multinomial Endogenous Switching Regression (MESR) model, we evaluate travel and waiting times associated with bank and mobile-based electronic transfers compared to manual cash disbursement. While digital payments reduce waiting time, they increase travel time due to limited financial infrastructure and liquidity shortages in rural areas. These findings confirm that digital systems improve transaction speed but also reveal implementation gaps that may undermine efficiency. Without adequate access to financial services, digitalisation can shift costs onto beneficiaries, limiting its intended benefits. This study contributes to ongoing policy debates on social protection reform and digital public service
delivery in low-resource settings, emphasising the need for complementary investments in local infrastructure to ensure equitable and efficient development outcomes.