Q&A;: How is Angola reaching the poor and vulnerable during Covid-19? – Angola

Josefina Nangombe and André Himi are among more than 247,000 heads of households benefiting from the new national cash transfer programme, Kwenda. Both live in Angola’s Huila province, an area famous for basket weaving, and began receiving quarterly government payments of 25,500kz, or about $40, last summer. The COVID-19 (coronavirus) pandemic, coupled with falling oil prices in Angola, has led to an economic crisis that is expected to have major adverse effects on human capital and poverty levels. Under these circumstances, Kwenda has been a lifeline for those like Josefina and André. With the new funds, Josefina, a mother of four, is acquiring pigs for breeding that she will sell, using the income to support her family. André, skeptical at first, now sees the hope of his dream of educating his children come true.

These testimonies are an example of the positive impact that the Kwenda program, launched in May 2020, is having on the poorest people in Angola. The program promotes financial inclusion by offering digital payments to most recipients. Kwenda also goes beyond cash transfers and provides poor and vulnerable households with access to human development services, such as health and education, and economic inclusion activities. Implemented by the government’s Social Support Fund (FAS), Kwenda aims to reach 1.6 million low-income families across the country, many of whom (60%) are headed by women.

Emma Mercedes Monsalve Montiel, The World Bank Co-Team Leader for the Digitization of Government-to-Person (G2Px) Payments Initiative, part of the National Social Protection System Strengthening Project, explains how G2P payments are unlocking key developments, such as financial inclusion and women’s economic empowerment in Angola.

How is this new anti-poverty program, Kwenda, having a positive impact on Angolans?

Kwenda is the first cash transfer program in Angola to provide social assistance in the form of cash and digital payments, as well as human development and economic inclusion activities. It plays a critical role in meeting the needs of the poorest and most vulnerable, especially in light of the economic turbulence caused by COVID-19.

Kwenda is more than just a government payment program; it provides beneficiaries with access to health and education services, support for birth registration, among others. Preliminary results suggest that beneficiary families have had better access to these services than ever before and are better able to meet their needs given the increased purchasing power the program offers. In addition, all beneficiaries benefit from either a sub-account, a simplified bank account or a mobile account. The intention is that the sub-accounts will also be converted into fully functional bank accounts in the future. This digitization of payments brings previously unbanked people into the formal financial sector and acts as a gateway to broader financial services, allowing them to invest or start their own business, save and manage risk, among other things. .

How do people receive program payments – electronically or in cash?

This program was launched at the onset of COVID-19 and to that end needed to be flexible to reach beneficiaries efficiently and safely. In fact, the majority of Kwenda beneficiaries receiving electronic payments are accessing the financial system for the first time in their lives. There are several different payment modalities depending on the context, each tailored to the particular needs of the target communities. A significant portion of payments is handled through digital means, such as mobile money accounts which were first introduced during the pandemic, simplified bank accounts or sub-accounts under the ATM card scheme that can be used at any ATM terminal or Point of Sale (POS) terminal. However, depending on the context, including due to infrastructure and connectivity issues, some beneficiaries receive cash payments but still receive a debit card linked to a bank account created by the program. As the program continues to grow, efforts are being made to strengthen the financial access network by engaging with local agents and community workers, to support digital payments in very remote communities, where cash payments are no longer the norm. These community agents (ADECOS) and social action centers (CASI) play an important role in the implementation of Kwenda at the local level, helping with registration, payments and complaints, as well as facilitating the beneficiaries’ access to health and education services.

How has this program benefited women in particular?

Government-to-person (G2P) payments can be a major step towards financial inclusion, overcoming the significant barriers that many women face by directing digital payments to female recipients. Since many targeted households are headed by women (60%), these cash transfers provide additional resources that enable women to make decisions that improve their livelihoods, such as improving housing, sending their children to school and the payment of their school fees. As we move forward in digital payments, we know that digitizing a predictable income stream for women is one way to catalyze income-generating activities among them. In the municipality of Seles, for example, a group of women came together and created a local market for the first time in their community, where they sell a range of different products with other members of the community, multiplying benefits received by the program.

What were the biggest challenges in rolling out this new program?

Angola is one of the largest countries in Africa, where a significant part of the population lives in remote areas. Infrastructure is fragile and roads in poor condition, which means it can be difficult to reach people in need. The lack of transport and telecommunications makes it particularly difficult to reach beneficiaries. In many rural communities, there are no markets and payment points and agents are rare. This is why the program uses different payment tools, combining digital mechanisms with physical cash delivery, to overcome some of these obstacles. The program also has payment points where beneficiaries can withdraw their payments. For the elderly and disabled, community workers will come to their homes and provide the services in person – it’s a way to make sure everyone is included.

Another challenge is the low level of literacy of the beneficiaries and the absence of a national identity card. To address this, the program facilitates the opening of bank or mobile accounts for beneficiaries with the program-specific Kwenda ID card. In addition, it is also implementing a basic financial literacy module for beneficiaries. The World Bank’s Finance, Competitiveness and Innovation (FCI) and Social Protection and Employment (SPJ) global practices have come together to advance the G2P digitization agenda in the country. Project Kwenda, led by SPJ through $320 million capital project funding, serves as an entry point to promote digital financial services by leveraging FCI-supported reforms to the payment system legal framework and the basic instant payment infrastructure. As of January 2022, the program had registered over 502,000 families and almost 247,000 families had already received at least one cash transfer payment since May 2020.