M-BIRR e-payment platform supports the neediest Ethiopian households
BY ABN #
According to The World Bank, in 2015-2016 Ethiopia faced the worst climatic impact in 50 years and resulted in 10 million food insecure households in rural Ethiopia. To address this challenge, The World Bank and other development agencies, in partnership with Ethiopian government agencies, provide support to more than 7.9millionneedy Ethiopians through the Productive Safety Net (PSNP) program.
The PSNP program addresses important issues like risk management, disasters, and food security. The program is implemented by Ethiopian federal agencies, including the Ministry of Finance and Economic Development (MOFED) and the Ministry of Agriculture, in conjunction with regional and local governments down to the Woreda level. The beneficiaries of the program receive cash or food transfers and include the poor, the elderly and people with disabilities.
Established in 2005, the PSNP program initially distributed cash physically to beneficiaries. However, this presented multiple challenges. First, physical cash distribution is time-consuming and prone to delays due to weather, poor roads and infrastructure, and the rural location of beneficiaries. These factors impacted the timeliness of cash reaching the intended households. With many households relying on PSNP transfers for food and everyday survival, such delays could be critical.
Another challenge was the potential of fraud, as physical cash is difficult to track and ensure that it reaches the correct recipients. A final challenge was a convenience, as many beneficiaries had to travel long distances to collect their cash from an authorized office.
This was very difficult for beneficiaries like Mrs. TadloKasea, who lives in South Gonder in Libokemkemworeda. She is 70 years old, has lost her husband and now lives with her sick daughter and her two toddler grandchildren. She is struggling to survive with her vulnerable family as she speaks about her experience on how she gets support from the PSNP program. She says,
”I was so frustrated! I and my family heard about the program and learned that we were potential beneficiaries. However, we found that the help center was too far away from my residence. We urgently sought support as quickly as possible, because during that time we had not eaten for two days. Fortunately, my neighbor came home and told me that through the M-BIRRe-payment service we could collect money at the closer satellite agents. So we easily registered and started to get the support. Since then for the past three years, we get monthly cash transfers from the program in our nearest location. Now we are safe.”
To address these challenges, MOFED began using the M-BIRR e-payment service in 2015 to distribute cash electronically. The M-BIRR service is co-owned by six leading Micro-Finance Institutions(Amhara, Oromia, Dedebit, OMO, Addis, and PEACE), covering most regions in Ethiopia, including Addis Abeba, Amhara, Oromia, Tigray, Diredawa, Harland SNNPR. With over 7,000 branches and agents, both in urban and rural areas, PSNP beneficiaries can collect their cash more conveniently, and closer to home.
With the M-BIRR service, PSNP payments are delivered electronically in a timely manner. Weather and infrastructure are no longer a major factor that can impact delivery. And finally, the potential for fraud is significantly reduced, as e-payments can be easily tracked to ensure that they are delivered to the correct beneficiary.
Mr. AsnakeTarekegn, who works as a PSNP technical coordinator in South Gonderlibokemkemworeda, says:
‘’Our Woreda is one of the PSNP cash transfer locations that have implemented e-payment using the M-BIRR service. What makes it special among others is it’s accessibility to the beneficiaries in their own kebele (village) and cash collection is done from a neighborhood shop. The M-BIRR service works well, makes it easier to pay beneficiaries and has a good network of payment locations too.”
In addition to assisting the needy, the PSNP program also provides supplemental income to workers who contribute to public projects in their community. For example, Mrs. Atala Alene came to an ACSI Microfinancebranch to collect her elderly mother’s payment. She looks healthy and young, and explains how she also receives payments from the PSNP program:
“I have five children and my husband’s income is not enough to support our big family. He had too much stress and I wanted to share his burden but didn`t realize how I could help. One day our Kebele communicated to us that we could join the public workgroup and explained how they would pay us through M-BIRR on a monthly basis from January through June, every year for six months. I had started working with the PSNP group, and we participated in environmental protection and reforestation projects. I starting earning my own income to help my family. I am so glad to have gotten this opportunity, and it has boosted my confidence.”
Today, over 800,000 households, representing over 3.5 million Ethiopians, receive cash support from PSNP via the M-BIRR service. There are many Woredas that still distribute cash physically. However, every year, more Woredas are embracing modern e-payment through M-BIRR.