BY NEW BUSINESS ETHIOPIA REPORTER
Food insecure people in Ethiopia who receive cash transfers through the Productive Safety Net Programme (PSNP) received their cash electronically into new bank accounts for the first time under a program the World Bank calls it 'a transformative moment in Ethiopia’s economic history'.
This is withnessed on 26th May 2012, when 20,000 poor benefited from the program, says the World Bank. Under this pilot Financial Inclusion project, PSNP recipients can now receive their money at the push of a button, saving literally weeks of process time that previously required government staff to withdraw, transport and account for cash manually. Oftentimes this process involved jeeps, mules or even delivery on foot.
In 2009, the World Bank started to look at ways of improving the delivery of PSNP cash transfers in Ethiopia. It partnered with the Bill & Melinda Gates Foundation to pilot-test electronic transfers from the PSNP, the largest safety net in Africa that is supported by 10 other donors.
The PSNP is a program defined by partnership, and the exciting results of the Financial Inclusion project were achieved by many stakeholders working together: including government, development partners, the private sector, technology providers, MFIs, and others.
The PSNP intends to scale up the pilot in 2013 to reach as many of its recipients as possible. The use of this technology could be a game changer for the reduction of poverty in Ethiopia: extending the banking system to the poorest of the poor, promoting a culture of saving and improving the efficiency and transparency of life-saving cash transfers.
The Productive Safety Net programme,he largest safety net in Africa, is run by the government of Ethiopia and supported by 10 donors. Operating since 2005, it aims to reduce food insecurity by providing transfers to over 7.5 million people so that they can provide enough food for their families. The transfer is conditional on participation in public works to improve community assets. These projects have mitigated the effects of drought and contributed to human capital. The ten donors that support the PSNP are USAID, World Bank, UK Aid, EC, CIDA, NRE, SIDA, WFP, DANIDA, IrishAid.
