85% of Rwanda’s population lives in rural areas, consequently rural development forms a core focus area for the Rwandan Government , with a goal of enabling graduation from poverty and extreme poverty. It targets a 50% graduation of Ubudehe Category 1-2 beneficiary households to category 3-4. As such Rwanda’s Vision 2020 Umurenge program (VUP) provides income support in the form of cash transfers to over 200,000 households living in extreme poverty and those vulnerable to falling into poverty; thus enabling poor households to overcome potential financial barriers. The expectation is that they will use this income to address basic needs and provide access to core services.
In the design of the VUP, it was expected that these payments would take 10 days to be effected end to end. However the current time period for payments to take effect is approximately 30 to 40 days. This means that beneficiaries are likely unable to meet their financial obligations for the delayed period given their level of vulnerability. This project aims to remove the bottlenecks to payment and hence ensure funds are paid to beneficiaries within the prescribed 10 days
The Local Administrative Entities Development Agency (LODA), a subsidiary of the Ministry of Local Government is tasked with providing direct support in form of a monthly stipend to the poorest Rwandans. Due to a lengthy approval process from both district and sector level, the monthly payment plan has come under criticism, as often the payment is delayed.
As part of the AFR Digital Financial Services (DFS) strategy, adoption of digital payments by rural low-income Rwandans is a major priority. Initiatives such as the digital Government to People (G2P) payments are a good step to encourage rural llow-income Rwandans to acquire phones and receive social protection payments via their mobile wallets. In the long-term, we envisage that low-income Rwandans will see the benefit of using their mobile phones to save, buy goods and services as well as purchasing insurance digitally.
LODA uses an IT system called Monitoring and Evaluation Information System (MEIS) that is used to prepare the payroll in which payments are made to all beneficiaries. AFR contracted a software development firm called AHT in May 2019 to upgrade the MEIS by adding the following features;
- Payroll electronic approvals by LODA, district and sector officers
- The MEIS will be connected to the Integrated Financial Management System (IFMIS) via Application Programming Interface (API) to speed up the disbursement of funds to beneficiary accounts
- Enable beneficiaries to receive money through their mobile wallet
