Digital Inclusion in Income-Generating Programmes: Lessons from Malaysia’s IPR and Indonesia’s Social Protection Ecosystem

Abstract

Digitalisation is reshaping how governments deliver social protection and design income-generating programmes for low-income households. Malaysia’s People’s Income Initiative (Inisiatif Pendapatan Rakyat, IPR) aims to eradicate hardcore poverty and raise incomes through structured opportunities in agriculture, food and services, supported by modern delivery systems and partnerships. Indonesia, meanwhile, has spent more than a decade digitising its social protection ecosystem, including the conditional cash transfer Program Keluarga Harapan (PKH) and the Non-Cash Food Assistance Programme (Bantuan Pangan Non Tunai, BPNT), shifting from cash and in-kind benefits to electronic accounts, e-vouchers and agent networks. These developments are often framed as pathways to financial and digital inclusion, yet evidence from the ground reveals a more complex reality. Connectivity, literacy, institutional capacity and everyday constraints determine who is reached, who is left behind and how far income support translates into better livelihoods. This article offers a conceptual analysis of digital inclusion in income-generating programmes by drawing lessons from Malaysia’s IPR and Indonesia’s digitalised social protection ecosystem. It synthesises literature on digital and financial inclusion, digital government-to-person (G2P) payments and recent reforms in both countries. The discussion argues that digitalisation can improve convenience, transparency and choice for low-income households and can open pathways to the wider digital economy when accompanied by appropriate support. However, there are also risks of digital exclusion, low or passive use of accounts, over-reliance on imperfect agent networks and the reproduction of existing inequalities when programme design assumes capacities that poor households do not yet have. On the basis of this comparative reflection, the article proposes design principles for digitally enabled income-generating programmes: treating digital channels as enablers rather than gatekeepers, combining digital onboarding with human support, investing in digital and financial literacy, strengthening consumer protection and data safeguards, and using digital systems not only for payments but also for linking participants to markets and services. It concludes by outlining a research agenda on digital inclusion within IPR and similar initiatives, with particular attention to women, rural communities and hardcore poor households.