Malawi has committed to transitioning government cash payments to electronic disbursements, as part of a broader move to switch to e-payments in the country.

Malawi’s government also says that it has joined the ‘Better Than Cash Alliance’, which was founded by the likes of the Bill & Melinda Gates Foundation and the Omidyar Network to empower people by helping them shift from cash to electronic payments.

A press statement released by Malawi’s government and the Better Than Cash Alliance says “most poor households have no option but to subsist almost entirely in an informal, cash-only economy, making it extraordinarily difficult for them to access financial services like bank accounts, to save for the future, build assets or get credit.”

Malawi’s government goes on to say in the statement that its 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.

The initial phase of the transition is planned to focus on social welfare and salary payments in Malawi, which has a population of just over 15 million according to the World Bank.

“We have tried many different cash payment modalities in Malawi but these have proved both expensive and subject to risk and fraud,” said minister of finance Ken Lipenga.

“Our aim at this point is to begin by reaching 21,000 people with payments of $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.

Ruth Goodwin-Groen, managing director of the Better Than Cash Alliance, added: “There 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.”

Malawi joins countries such as Afghanistan, Colombia, Kenya, Peru and the Philippines that are members for technical and financial support from the Better Than Cash Alliance.