MICROCAPITAL BRIEF: Government of Malawi Joins Better Than Cash Alliance (BTC) as Part of Move to Adopt Electronic Payments

The Government of Malawi recently joined the Better Than Cash Alliance (BTC), a US-based nonprofit, to transition Malawi from cash to electronic payments. According to Malawian Minister of Finance Ken Lipenga, the first phase will convert social welfare and salary payments to electronic disbursements, which will “reach 21,000 people with payments of [USD] 3 million.” The government hopes that shifting to e-money will increase the financial inclusion of low-income Malawians, improve transparency, reduce costs and accelerate economic growth. BTC has initiated similar e-payment initiatives with five other countries, including Afghanistan, Colombia, Kenya, Peru and the Philippines. Mr Lipenga hopes that Malawi “will be able to learn from [these] other countries” about handling “the complexities of the transition” and ensuring “that not only the economy but also the people benefit [1].” While the nature of the Malawian model is yet to be decided upon, in other countries where BTC has implemented similar models, subscribers do not need a traditional bank account but must create a mobile wallet in order to receive these electronic disbursements [2].

As of July 2013, BTC has partnerships with national governments of six countries as well as ten nonprofit development organizations. Financial information for BTC is unavailable.

By Michael Averell, Research Associate

About Better Than Cash Alliance (BTC)

Better Than Cash Alliance (BTC) is a US-based nongovernment organization founded in 2012 through a collaboration between the Bill and Melinda Gates Foundations, Citigroup, the Ford Foundation, the Omidyar Network, USAID, UNCDF and Visa. The purpose of BTC is to promote financial inclusion by facilitating governments, the private sector and the development community to make the shift from cash-based payments to electronic payments. BTC provides policy, technical and financial assistance to facilitate the transition. As of July 2013, BTC has partnerships with national governments of six countries as well as ten nonprofit development organizations. Financial information for BTC is unavailable.

Sources and Additional Resources

[1] IT News Africa: “Malawi Joins Global Better Than Cash Alliance,” http://www.itnewsafrica.com/2013/07/malawi-joins-global-better-than-cash-alliance/

[2] Mobile Money for Development: “Better That Cash: How Governments, Donors and the Private Sector can Support Mobile Money & Mobile Banking,” http://mobilemoneyfordevelopment.wordpress.com/2013/02/13/better-than-cash-how-governments-donors-and-the-private-sector-can-support-mobile-money-mobile-banking/

MicroCapital story, March 5, 2013, “MICROCAPITAL BRIEF: Anne Hastings of Fonkoze Outlines Framework for National Mobile Money Systems,” https://www.microcapital.org/microcapital-brief-anne-hastings-of-fonkoze-outlines-framework-for-national-mobile-money-systems/

MicroCapital story, January 30, 2012, “MICROCAPITAL BRIEF: Beyond Microfinance, Metafinance can Serve Communal Needs Such as Access to Clean Water, Reports Melanies Walker of Bill and Melinda Gates Foundation,” https://www.microcapital.org/microcapital-brief-beyond-microfinance-metafinance-can-serve-communal-needs-such-as-access-to-clean-water-reports-melanie-walker-of-bill-and-melinda-gates-foundation/

MicroCapital Universe Profile: About Better Than Cash Alliance (BTC) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Better+Than+Cash+Alliance+%28BTC%29

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