Monday, December 14, 2015

Technology Knows No Age: Voices of Elderly Persons Receiving Mobile-Enabled SAGE Cash Transfers in Uganda

by Julius Okello  

This blog reflects on the immediate impacts of the Senior Citizens Grant, a component of the Social Assistance Grant for Empowerment (SAGE) provided by the Government of Uganda. Digital payments geared toward changing the lives of elderly persons started with the SAGE pilot program in 2011. SAGE remits monthly stipend to beneficiaries aged 60 years and above through Mobile Telecommunication Network (MTN). Although mobile money services have existed for seven years in Uganda, they are still viewed as novel and mostly used by younger generations. With the mobile disbursement of SAGE, however, older persons in Uganda are gradually tapping into these electronic payment innovations. 

SAGE Beneficiaries guided by MTN agents to insert MTN yellow card into yellow easy talk phone 

Initially, when SAGE payments through mobile money were introduced, many of the elderly beneficiaries were very confused. Most of them did not even have a mobile phone, nor did they have any knowledge of how to operate one. Others wondered how they would receive money from a phone -- a machine! This was further coupled with concerns from the older persons and politicians about whether MTN could smoothly implement the program, given the corruption in Uganda that has derailed most government programs in the past as well as the fact that mobile money was still a new technology to reckon with for the “born before computer” (BCC) generation. Nonetheless, senior citizens grants (SCG) beneficiaries are now encountering the reality of mobile money services. Payments to beneficiaries’ mobile money accounts are made through an instant e-money transfer service and are converted into cash by an MTN agent at designated pay points. All beneficiaries are given a five-digit Personal Identification Number (PIN) by MTN and also receive an identification card issued by the SAGE programme that MTN agents use for identity verification. This enables registered MTN subscribers to access their money through authorized MTN mobile money agents in their district. After verification, the recipient’s MTN card is inserted into the yellow talk machine to verify the balance on the mobile money account before paying out the stipulated amounts. While some beneficiaries do not necessarily grasp the entire process of effecting payment, they are aware of the amount that they are supposed to receive. 

Why MTN mobile money for SAGE cash transfer? 
Given past experiences of corruption and mismanagement of government programs for the poor, the Ugandan Ministry of Gender Labour and Social Development felt that SAGE money should be handled by MTN for purposes of: 
  • Extending services nearer to older persons.
  • Minimizing transfer costs through banks.
  • Creating an enabling environment for the elderly who are mostly unbanked.
  • Reducing risks associated with handling cash within the ministries.
  • Reducing load on management and its associated challenges.
  • Minimizing leakage associated with handling cash.
  • Guaranteeing transparency and accountability for SAGE funds.
The program was the first of its kind to be implemented by the government through MTN mobile money and it has been fairly effective and serves as a lesson for government, individuals, businesses and development partners.  

Overall, it has been observed that cash transfers through MTN mobile money has improved the nutrition of older persons and their families in Uganda. Over 90% of beneficiaries spend the largest portion of their cash transfer on food and the smallest proportion (10%) reported spending it on alcohol. Meals eaten by beneficiary households have greatly improved; unlike earlier older persons can now afford two reasonable meals per day for themselves and their families, particularly their grandchildren. A 69-year-old woman in Lwamata Sub County revealed, “Because of the availability of quality food, our grandchildren are now happy to go to school, are able to stay in school longer and learn better.” Another respondent in Kiboga town council said, "My grandchildren in lower primary can now carry food stuffs to school for at least three weeks from the time the payment is made by MTN, they are now willing to go and stay longer at school since they have packed food."

Another frequent use of SAGE cash transfers is for medical care. About 52% of the respondents reported having spent the money to pay for their medical bills and 40% used it to purchase prescription medicines. A 77-year-old man from Kibinga sub county, explained, “Before the SAGE cash transfer, I would hesitate to go to hospital because most government hospitals require us to buy medicine. But with the SAGE cash transfer I can easily afford paying for my prescriptions as I am waiting for my children’s assistance.” 

Paying school fees is generally a major problem for most vulnerable families in rural areas. However, this is slowly changing with more efficient disbursement of SAGE cash transfers. According to older persons, with the little they get they are able to invest in school fees as well as buy scholastic materials for their grandchildren. This was confirmed by an 87-year-old woman who stated, “I have five grandchildren whose mothers died of HIV/AIDS. Each of them left children for whom school fees has to be paid. Through the SAGE cash transfer I have been able to educate three of the children up to primary six, senior one and four.” A head teacher was also quoted saying, “Most children in the SAGE households can now ably attend school. Their completion rate has greatly improved compared to before SAGE.” All of these findings are worthy of substantiation by future research.  

Elderly women’s participation in community affairs has also increased with the SAGE program resulting in greater self-esteem and empowerment. Female  beneficiaries feel less discriminated against in their communities; they feel more valued by their families on account of their ability to make social contributions within their families and community. For instance, an 82-year-old woman from Bukomero sub county was able to pay for the funeral of her neighbor's daughter. She said, “Recently my neighbor lost a daughter, there was a need to secure a coffin and other needs. I contributed four thousand, this happened when MTN agents had just paid me SAGE money.”   

SAGE beneficiary households also tend to invest the grant in increasing productivity of farming and agriculture and the establishing small businesses. An elderly woman in Kibiga Sub County stated, “I regularly save a portion of my grant to cover emergencies, cultivation, meeting the basic needs of my household as well as saving to hire day-laborers to open up idle agricultural land”. 20-30% of SAGE beneficiaries regularly invest in agricultural production by buying livestock and other agricultural inputs and hiring ox-ploughs and day-laborers.

While the mobile transfer of government assistance has contributed to the improved welfare of older persons and their families in Uganda, MTN has faced several challenges in the implementation of the SAGE program. Limited infrastructure and lack of a robust mechanism for controlling fraud has been a problem, particularly in Kole, Nebbi and Katakwi. In addition, there are only a few banks for mobile money operators to acquire the necessary floats for SAGE funds. Due to the large number of beneficiaries relative to MTN agents, elderly persons have to sometimes wait longer then anticipated to receive their funds and also face delays in the replacement of lost or faulty SAGE cards. 

Overall, however, the SAGE pilot program, remitting funds through MTN mobile money, has proved to compliment goals of ending hunger and poverty through financial inclusion of the unbanked. For more efficient delivery of services especially in rural areas, the SAGE programme has very good lessons to offer. Mobile money seems to be the most viable way to implement such programs and minimize the bureaucracy of government institutions and the resulting leakages and corruption that are common to many present governments in Africa. 

The views expressed in this blog are not necessarily those of the African Institute for Strategic Research Governance and Development.

For more details, read Julius Okello's Final Report

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