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M-Pesa powers Indian pension pilot

by Sudhir Kumar Arya and Kaushik Mehrotra, Heads of Vodafone Business Services, Vodafone India @VodafoneGroup

Vodafone’s mobile money service M-Pesa is at the heart of a pioneering scheme to directly pay thousands of pensioners in remote rural villages across Haryana state in Northern India.

Social Security pensions have been traditionally distributed locally through a Sarpanch – the elected head of each village’s government.  The Sarpanch would share a list of all pensioners in their village with the Department of Social Justice and Empowerment.  A total payment would be transferred to the Sarpanch and subsequently distributed to pensioners.

The introduction of M-Pesa has helped bridge this gap, creating a more convenient and secure way for the State to pay pensions directly to recipients and, in the process, reduce the number of overall discrepancies in the payment process. The right pensioners get paid, on time.

Under the scheme, every pensioner is given a Vodafone contract and an M-Pesa account.  The department now transfers the pension directly into the M-Pesa account. The pensioner can withdraw funds from a network of more than 3,200 M-Pesa agents spread out across Haryana state.  

In some cases, pensioners could previously only access their money when the Sarpanch visited the village, which could be as infrequently as just a couple of days each month.

M-Pesa has also reduced the number of ‘ghost’ beneficiaries by cleaning up citizen data. This has also enabled the State to make considerable savings.

The project started as a pilot in five villages in the Karnal and Mahendragarh districts, but has now deployed successfully across 67 villages in the state, distributing pensions with a total value of Rs. 165 crore (about £165,000) to more than 11,500 people each month.

The Government of Haryana has lauded Vodafone India’s contribution to the ‘Thaari Pension, Thaare Pass’ project. During the State’s celebrations for India’s Republic Day, the Vodafone M-Pesa team received an ‘outstanding contribution’ award from Haryana’s Chief Minister, Shri. Manohar Lal Khattar.

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