The Malawi government on Monday announced that it had joined the Better than Cash Alliance under which it has committed itself to change its payment systems from cash to electronic based.

Better Than Cash Alliance says in a statement that Malawi’s primary goals in shifting to e-money are to increase transparency, decrease costs, accelerate economic growth, and address poverty by increasing financial inclusion for all Malawians.

It quotes Finance Minister Ken Lipenga as saying that Malawi has tried many different cash payment modalities but that these have proved both expensive and subject to risk and fraud.

Lipenga told the alliance that Malawi’s initial phase of the transition would focus on social welfare and salary payments.

“Our aim at this point is to begin by reaching 21,000 people with payments of US$3 million. Of course, we already know that transitioning isn’t easy and that is why we are joining the Better Than Cash Alliance. We will be able to learn from other countries how best to handle the complexities of transition and ensure that not only the economy but also the people benefit,” said Lipenga.

Better Than Cash Alliance, an initiative of the Bill & Melinda Gates Foundation, Citi, Ford Foundation, Omidyar Network, the United States Agency for International Development (Usaid), United Nations Capital Development Fund and Visa Inc, works with governments, the development community and the private sector to adopt the use of electronic payments and provides resources to those who commit to make the transition.

Better than Cash Alliance Managing Director, Ruth Goodwin-Groen says here are many benefits of electronic payments but also challenges and these can best be tackled in partnerships.

“We welcome Malawi into the Better Than Cash Alliance and look forward to our partnership with them,” he said.

Malawi joins the governments of Afghanistan, Colombia, Kenya, Peru and the Philippines which have committed to digitize their disbursements and payments to people living in poverty, thereby becoming eligible members for technical and financial support from the Better Than Cash Alliance. – By Thom Khanje

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