Laut Kitha, 92, of Mwenitete Village in Chitipa District, used to endure a nearly 10-kilometre uphill walk to receive social cash transfers at Misuku Market.
This has been a monthly routine since 2018 when he joined the Social Cash Transfer Programme (SCTP) that targets the ultra-poor households.
The widower, who cares for three grandchildren, received his final cash payment this month.
He is excited with the news that he will receive the next sum through his mobile phone.
“The new system is easy and convenient. The long trips up Misuku Hills are history. I’ll keep my money safely and only cash out when I need it,” she says.
Through SCTP, he has acquired goats and cattle. Some recipients in his village do small businesses to grow their incomes so they can buy food and other basic needs, send children to school and save for tough times.
However, there were concerns with the old system.
Lucy Mugala, 76, from Mwenechisenga Village in T/A Mwenewenya, was duped by a relative she sent to receive social cash transfer on her behalf.
“The electronic payments will save us from walking long distances or sending dishonest relatives, who couldn’t bring us the whole amount,” Kitha says.
Laurent Kansinjiro, deputy director of social welfare responsible for SCTP in the Ministry of Gender, Social Welfare says Chitipa has phased out manual payment in favour of e-payments.
“We have already identified an e-payment service provider [TNM Mpamba] to start registering beneficiaries as part of the Know Your Customer processes before taking them on board,” he says.
TNM officials introduced the new system to the Chitipa District Executive Committee two weeks ago.
Kansinjiro says the mobile money company will “will be on the ground” within a month to complete SCTP beneficiaries migrating to e-payments.
“We expect a lot of benefits from this migration to E-Payment,” says Kansinjiro. “At least the beneficiaries will have the freedom to plan and cash their money at a time and place where they find it fit. They no longer have to endure a long wait for selected paydays and lengthy walks to designated pay points,” he says.
Crediting the social cash transfers to the beneficiary mobile money accounts minimises the risks of also keeping cash at home.
“So we are looking at those benefits: dignity, flexibility, choice, security of their money and what we call financial inclusion,” says Kansinjiro.
He encouraged TNM and Airtel to expand telecommunication networks to unreached communities, especially in rural areas where most SCTP beneficiaries live.
“We also encourage the use of multiple e-payment modalities,” says Kansinjiro. “In areas without connectivity , one can use an alternative e-payment system available. It could be banking or any other forms that are closer to e-payment.”
Digital finance expert Lumbani Gondwe observes that the cash disbursements were marred by fraud, inefficiencies and discrepancies.
He says the switch to e-payment was long-overdue and in line with the national push for a cashless economy and financial Inclusion.
“Digital financial services will bring more operational efficiency and security in SCTP management. E-payments are the main drivers of financial inclusivity, especially for rural communities and among ultra-poor people,” says Gondwe.
The Malawi Digital Economy Strategy by 2026 promotes inclusive wealth creation for a prosperous economy.
Gondwe says financial Inclusion is the key to unlocking social and economic growth of developing countries.
Rwanda, Bangladeshi, Nigeria and Kenya have achieved enviable milestones in the adoption of digital financial services.
“Access to Digital Financial Services helps users to save their time and reduce costs tremendously in performing financial transactions,” says the expert. “However, stakeholders and regulators need to ensure that the e-payment platforms and delivery channels meet the highest security standards accompanied by a robust support infrastructure.
