CAIXA Tem and the Auxílio Emergencial in Brazil: financial inclusion, digital challenges, and evidence gaps
During the COVID-19 pandemic, Brazil implemented Auxílio Emergencial (Emergency Aid), an income transfer policy. The program aimed to help millions of citizens facing economic difficulties while they were unable to work. To ensure these resources reached millions of beneficiaries quickly, the Brazilian government introduced a new digital application, CAIXA Tem, to deliver payments.
CAIXA Tem was launched in April 2020 as a digital platform that allowed citizens to receive social benefits without a traditional bank account. This platform provided beneficiaries with a “digital social savings account,” a type of social savings account designed to channel public resources digitally to the most vulnerable populations. Beneficiaries could access their funds through the CAIXA Tem mobile app, which allowed them to make digital payments, transfer money to other accounts, or generate a QR code to withdraw cash at ATMs, lottery retailers, or CAIXA branches without needing a physical bank card. Thanks to this innovation, the state-owned bank Caixa Econômica Federal became the hub of a mass outreach strategy that combined the use of public infrastructure with technological solutions. This allowed the government to deliver benefits to a large proportion of the population with minimal in-person interaction.
The implementation of CAIXA Tem had a significant effect on financial inclusion. A study conducted by Fundação Getulio Vargas documents that millions of people accessed a formal financial account for the first time through the platform, demonstrating how digital tools, combined with public programs, can have a substantial impact on the financial inclusion of historically excluded sectors.
At the same time, a lack of stable internet access, absence of suitable devices, or low digital literacy, meant that parts of the population could not fully benefit from the program. In addition, a report by InternetLab and Derechos Digitales pointed out that automated decisions regarding beneficiary eligibility, managed by Dataprev (a state-owned technology company that manages Brazil’s social security data infrastructure)through algorithms and based on administrative records, lacked mechanisms for individuals to appeal decisions. As a result, thousands of beneficiaries who were unjustly excluded from the Auxílio Emergencial COVID-19 scheme had to resort to the judicial system as the only means to claim their right to receive payments. The same report notes that there were database failures, outdated records, and limitations in algorithmic transparency, generating significant vulnerabilities in terms of governance and the protection of citizens’ personal data.
Overall, CAIXA Tem provided a state digital solution which enabled the distribution of benefits on an unprecedented scale in Brazil, while promoting the financial inclusion of millions. However, digitalization risks excluding parts of the population - often those already marginalized - and can generate new challenges related to data governance, transparency in automated processes, and the need for effective appeal mechanisms. The speed and scale achieved by digitization must be balanced with accessibility guarantees, human intervention in case verification, and measures aimed at addressing digital gaps, so that digitizing public programs does not reproduce new forms of exclusion.
References
Caixa Econômica Federal. (2021). Relatório Integrado 2021. Brasília: Caixa Econômica Federal. Retrieved from https://www.caixa.gov.br/Downloads/caixa-governanca/Relatorio-Integrado-2021.pdf
Fundação Getulio Vargas. (2021). Pandemia de Covid-19 e auxílio emergencial: avaliação do impacto na bancarização no Brasil. Rio de Janeiro: FGV. Retrieved from https://repositorio.fgv.br/items/d156d8df-e116-4859-b352-35a1f416935c
InternetLab & Derechos Digitales. (2022). O Auxílio Emergencial no Brasil – Inteligência Artificial e Inclusão. São Paulo / Santiago: InternetLab, Derechos Digitales. Retrieved from https://www.derechosdigitales.org/wp-content/uploads/01_Informe-Brasil_Inteligencia-Artificial-e-Inclusao_PT_22042022.pdf
Impacto Blog / Fundação Getulio Vargas. (2021). Efeitos da Exclusão Digital no Acesso ao Auxílio Emergencial. São Paulo: FGV. Retrieved from https://www.impacto.blog.br/wp-content/uploads/2021/05/Auxilio_InclusaoDigital_VersaoFinal_2505.pdf
World Bank. (2021). Social Protection and Jobs Responses to COVID-19: A Real-Time Review of Country Measures. Washington, D.C.: World Bank. Retrieved from https://documents.worldbank.org/en/publication/documents-reports/documentdetail/099255012142121495