E-payments: Ensuring timely and efficient social cash transfers

Alina sitting outside her home with her last-born sons. In her hand is her ATM card and cash transfer passbook
© UNICEF Malawi/2019/Moving Minds

By Lulutani Tembo, UNICEF Malawi

Alina Daniel is a bubbly 38-year-old mother. She resides in Mb’awa village in Balaka district with her husband and four children. Alina’s husband is disabled, and she weaves mats for sale as the family’s main source of income. In fact, outside their home there are plenty of mats that are visible. The opportunity to start the mats business was made possible when the family was put on the Social Cash Transfer Programme in 2014.

The Social Cash Transfer Programme (SCTP) was introduced in Malawi in 2006 with an aim to provide assistance to the ultra-poor families in districts across the country. The SCTP aims to reduce poverty and hunger, and to increase school enrolment.  In Balaka, the SCTP is being implemented by Government of Malawi with financial assistance from Government of Ireland and Technical Support from UNICEF.

Alina’s family receive about 7000 Malawi Kwacha (9 USD) a month to help them meet their basic needs. The programme adopted the bank model payment mechanism where beneficiaries like Alina have bank accounts with debit card. This model ensures that Alina receives her transfers securely and timely enhancing the impact of the transfers.

The benefits of SCTP

Most of Malawi’s population lives in rural areas. With 20% living in extreme poverty (IHS, 2018). Most families rely on piece works for income. Alina’s family was one of them. “Before the social cash transfer, life was difficult. I relied on piece works on people’s farms. My husband’s disability made it worse given he could not help. I always asked myself why us,” Alina explains with grief.

The SCTP provided the family with their much-needed break. Seated on one of her woven mats and her children around her, Alina describes that the moment she was told that they are being put on SCTP, she promised herself that she will ensure to use the money wisely. That was when she decided she is going to learn how to make mats to sell in order to provide additional income for the family. “I paid 300 kwacha for a training to learn this mat weaving skill, now I sell them for 1800 kwacha each”, Alina says. “If it wasn’t for the SCTP, I would have never learnt this skill.”

Alina’s twin daughters happy in their school uniforms that were bought through SCTP money
© UNICEF Malawi/2019/Moving Minds

With the first payment, Alina also prioritized her children’s education. She bought school uniforms for her 9-year-old twin daughters who are in primary school. She reveals her biggest investment was buying livestock with the cash transfer. “I bought a goat and luckily it reproduced and continued to multiply, today I have 8 goats,” she explains.

Malawi is vulnerable to climate shocks, and Balaka isn’t spared if there is floods or drought. Alina decided to take a loan from the village savings bank to buy maize for her family in advance in case the rainy season ruins her crops. The plan was to pay back the loan after selling her goats and it worked. Because of this, her family still had food despite the effects of the March 2019 floods. Alina even bought ducks that she uses as a source of protein for the families meals.

Additionally, her children previously had to share blankets, but now each of them has their own blanket thanks to the money from SCTP. The family also managed to buy buckets that they use to collect water from the borehole in their village. “I never had all of these things before the SCTP, I am at peace knowing that my family is being able to meet our needs. I see a big difference in our lives and its great,” Alina illustrates.

Efficiency of E-Payments

The icing on the cake for Alina is that the SCTP enabled her to have a bank account and ATM card with First Capital Bank. “I like that I can keep my money in my bank account and withdraw it when I want to without having to wait in the long queues at the normal cash pay points that are done at nearby schools. There was a time my husband and I went to withdraw 23,000 Malawi Kwacha from the ATM after a few months of arrears. It was quick, efficient and very fulfilling,” a cheerful Alina explains.

The electronic payments (e-payments) are efficient not only for beneficiaries like Alina, but for the officers processing the payments. Stanford Dunga is an assistant agency manager at First Capital Bank in Balaka district. He appreciates the e-payment system because it reduces their workload as transactions are reconciled on a real time basis electronically.

Stanford (middle) assisting beneficiaries at a cash point at M’bawa Primary School in Balaka
© UNICEF Malawi/2019/Moving Minds

“We register our beneficiaries using their passbooks and generate their ATM cards and give them PIN numbers. When we visit the beneficiaries for cash distribution in the communities, beneficiaries check their balance using our Point of Sale system. We also encourage them not to withdraw everything but to save some of their money in their account,” Stanford explains.

Support from Irish Aid and UNICEF

With financial support from Irish Aid, UNICEF has supported the Government of Malawi in digitizing payment of social cash transfers to families living in extreme poverty. So far over 21,000 households have been reached in the two districts of Balaka and Ntcheu.

 “The concept of cash transfers through e-payments helps beneficiaries to easily and effectively access their money without delay.  The e-payment system takes away the requirement to queue and wait to receive money on a specific date and time,” says UNICEF Chief of Social Policy, Beatrice Targa. “Even better is that the money is in a bank account and people do not need to store large amounts of cash at home.”

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