MOBILE CASH TRANSFER PILOT FOR PSNP CLIENTS IN LAY

GAYINT AND TACH GAYINT WOREDAS OF AMHARA REGION,

ETHIOPIA

FH ETHIOPIA DEVELOPMENT FOOD SECURITY ACTIVITY

FH-ETHIOPIA DEVELOPMENT FOOD SECURITY ACTIVITY-

TARGETED RESPONSE FOR AGRICULTURE, INCOME AND
NUTRITION

SEPTEMBER, 2018
ADDIS ABABA

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ACKNOWLEDGEMENT
Thanks to the June 2018 Amhara Region PSNP Joint Review and Implementation Support (JRIS) meeting
participants who raised critical questions on the overall cash transfer with special emphasis on e-
payment which contributed to the scope of this study.

We are grateful for Woreda and Zonal Food Security (FS) and Amhara Credit and Saving Institute
(ACSI) branch offices for providing data on list of unpaid clients and the unpaid amount of cash in Lay
Gayint Woreda. Lay Gayint Woreda FS has also provided assessment result on why clients didn’t collect
their entitlements.

Special thanks to FH field staff in the two Woredas for their unreserved effort to interview clients and
conduct Focus Group Discussions (FGDs) with Kebele administration and e-payment steering
committee members.

We are highly indebted to Productive Safety Net Program (PSNP) clients who participated in the survey
interview and made this study possible.

Cover page picture: Cash transfer transaction between ACSI cashier and a PW participant in
Tach Gayint Woreda Agat Kebele.

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ACRONYMS

ACSI Amhara Credit and Saving Institute

ADA Amhara Development Association
BCC Behavioral Change Communication
DA Development Agent
FDRE Federal Democratic Republic of Ethiopia
FGD Focus Group Discussion
FH Food for the Hungry
FSP Financial Service Provider
JRIS Joint Review and Implementation Support
KFSTF Kebele Food Security Task Force
KYC Know Your Customer
LG Lay Gayint
MBL Master Beneficiary List
NBE National Bank of Ethiopia
NGO Non-Governmental Organization
PASS Payroll Attendance Sheet System
PDS Permanent Direct Support
PIM Program Implementation Manual
PIN Personal Identification Number
PSNP Productive Safety Net Program
PW Public Work
RuSaCCOs Rural Saving and Credit Cooperatives
SNNP Southern Nations and Nationalities People
TG Tach Gayint
USAID United States Agency for International Development
WFS Woreda Food Security
WFSP Woreda Food Security Process
WoFEC Woreda Office of Finance and Economic Cooperation

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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY ..................................................................................................................... 5

1.1. BACKGROUND ............................................................................................................................ 5
1.2. OBJECTIVES OF THE STUDY .................................................................................................. 5
1.3. KEY FINDINGS OF THE STUDY ............................................................................................. 6
1.4. KEY RECOMMENDATIONS ...................................................................................................... 6
2. SURVEY BACKGROUND ................................................................................................................... 7
2.1. OVERVIEW OF PROJECT CONTEXT ....................................................................................... 7
2.1.1. AMHARA REGIONAL STATE .................................................................................................. 7
2.1.2. PRODUCTIVE SAFETY NET PROGRAM (PSNP) ............................................................... 8
2.1.3. RURAL FINANCIAL SERVICES IN ETHIOPIA .................................................................... 9
2.1.4. MOBILE MONEY IN ETHIOPIA ............................................................................................... 9
2.2. ELECTRONIC CASH TRANSFER PROJECT BACKGROUND .......................................... 10
2.2.1. PROJECT DESCRIPTION ......................................................................................................... 10
2.2.2. SERVICE PROVIDER.................................................................................................................. 11
2.2.3. PROJECT PARTICIPANTS ...................................................................................................... 12
2.2.4. OBJECTIVES OF THE STUDY ................................................................................................ 12
2.2.5. RESEARCH QUESTIONS ......................................................................................................... 12
3. SCOPE AND METHODOLOGY ..................................................................................................... 13
3.1. METHODOLOGY ........................................................................................................................... 13
3.2. DATA COLLECTION AND ANALYSIS ................................................................................... 14
3.3. LIMITATIONS OF THE STUDY ................................................................................................. 14
4. RESEARCH FINDINGS ................................................................................................................. 15
4.1. AMOUNT OF CASH TRANSFERRED .................................................................................. 15
4.2. PSNP CLIENTS’ PARTICIPATION ON CASH TRANSFER ........................................... 15
4.3. TIMELINESS AND PREDICTABILITY OF TRANSFERS ................................................. 16
4.4. HOW WELL WAS THE TARGETING CONDUCTED? ................................................... 19
4.5. REASONS FOR NOT COLLECTING CASH ....................................................................... 21
4.6. CONVENIENCE TO CLIENTS ............................................................................................... 22
4.7. WAS SAVING ENCOURAGED/FACILITATED? ............................................................... 24
4.8. GENDER PRESPECTIVE OF MOBILE CASH TRANSFER .............................................. 25

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4.9. STAKEHOLDERS’ ENGAGEMENT ....................................................................................... 26
4.9.1. STAKEHOLDER RESPONSIBILITIES ............................................................................... 26
4.9.2. STRENGTHS OF STAKEHOLDERS .................................................................................. 28
4.9.3. GAPS OF EACH STAKEHOLDER ..................................................................................... 28
4.10. CLIENT SATISFACTION WITH E-PAYMENT .............................................................. 30
4.11. SCALABILITY AND FINANCIAL INCLUSION ............................................................. 33
5. CONCLUSION ................................................................................................................................ 34
6. RECOMMENDATIONS ................................................................................................................. 35
7. APPENDICES ................................................................................................................................... 36
7.1. INTERVIEW QUESTIONS ....................................................................................................... 36
7.2. FGD PARTICIPANTS ................................................................................................................ 36

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1. EXECUTIVE SUMMARY

1.1. BACKGROUND

The United States Agency for International Development (USAID) entered into a cooperative agreement
with FH Ethiopia (FHE) to implement a five-year DFSA-TRAIN project in support of the Federal Democratic
Republic of Ethiopia (FDRE) Productive Safety Net Program (PSNP). This FH-implemented project operates
with the bilateral agreement entered between the United States and the FDRE. In addition to the food
commodities provided to support the PSNP in seven Woredas1 of Amhara Region, USAID has also allocated
resources to pilot cash payments in Lay Gayint and Tach Gayint Woredas. The cash transfer service is carried
out through Amhara Credit and Saving Institution (ACSI).

ACSI is a private limited liability company registered in the FDRE as a Micro-Finance Institution eligible to
disburse payments electronically via technology providers. Thus, FH and ACSI agreed to pilot electronic
payment for PSNP beneficiaries in the aforementioned Woredas. The electronic transfer demonstrates the
technical, operational and managerial feasibility over manual cash transfer exercised by Government in the
previous years.

Each year Government has been undertaking annual certification/re-certification process to identify PSNP
participants based on the PSNP Program Implementation Manual (PIM). Project participants are categorized
into two components: Public Work (PW) and Permanent Direct Support (PDS). In 2018 the project was
conducted in Lay Gayint and Tach Gayint Woredas. Participants were 33,108 HHs (26,878 PW and 6,230
PDS). Total beneficiaries of the project were 99,063 (50,251 Female, and 48,812 Male).

The study aimed to understand mobile cash transfer effectiveness and satisfaction level of PSNP clients during
the three rounds (January to March) e-payment in 2018. It mainly employed primary data obtained from
survey interview on PSNP clients and FGDs with e-payment steering committees and Kebele administrators,
KII. These data were complemented with secondary data obtained from e-payment project monitoring
updates on weekly cash transfer, records of cash transfer milestone, Regional e-payment steering committee
minutes, and Government assessment on unpaid clients.

1.2. OBJECTIVES OF THE STUDY

The study was conducted from June 4, 2018 to July 16, 2018. The general objective of the study was: To
learn from evidences and document lessons on mobile cash transfer pilot in the two Woredas of Lay Gayint
and Tach Gayint. Specific objectives were to:

 Assess effectiveness of mobile cash transfer for PSNP clients

 Assess client satisfaction on the service provided
 Provide recommendation for future e-payment program

1
Next to the lowest administration unit in Ethiopia
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1.3. KEY FINDINGS OF THE STUDY
 Mobile cash transfer proved to be effective modality to transfer cash to PSNP clients in the project
area.
 Cash was not transferred timely as per the PIM. All implementing partners have contributed for the
delay.
 As there were valid reasons for cases of clients not collecting January and February 2018 cash
entitlements, there were also accounts of unexplained cases which suggest faulty targeting, poor
data quality or other reasons that need further investigation.
 As ACSI was paying clients only through its satellite offices that are located only in some of the
Kebeles, clients couldn’t fully benefit from what mobile cash transfer offers.
 FH initiated Woreda and Regional level e-payment steering committees were functional and have
contributed to effective implementation of the project.
 More than 80% of survey participants preferred mobile cash transfer to the manual cash transfer.
 Mobile cash transfer ensures money is transferred to the right person.
 The extended period for cash withdrawal has given clients the opportunity to collect their cash at
their convenience (holidays) which allows them to have more time for work.
 PSNP clients have low level of literacy and a few of them own mobile phones.

1.4. KEY RECOMMENDATIONS

 Objectively verifiable stakeholder performance assessment indicators should be set, appraisal be
regularly conducted and accountability scheme established to enhance timeliness of transfer.
 Mobile apparatus should be availed to the community with low price. Mobile network quality should
be improved.
 ACSI must pay clients at their Kebele centers if possible at sub-Kebele level. ACSI must engage agents
to ensure continuous presence of payers at the clients’ vicinity.
 Regional Government required to improve literacy and numeracy level through adult education.
 Coordinated effort of WFSTF, KFSTF and CFSTF is required to improve targeting by ensuring
enhanced public participation via Kebele complaint redressing committee.

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2. SURVEY BACKGROUND

2.1. OVERVIEW OF PROJECT CONTEXT

2.1.1. AMHARA REGIONAL STATE
The Amhara National Regional State is located in the North Western and North Central part of Ethiopia.
The capital city of Amhara National Regional State is Bahir Dar. The Region covers an estimated area of
170,752 square kilometers. Population of Amhara Regional State is 37,490,108.2 About 85% of the people
are engaged in agriculture. It is one of the major teff (staple food) producing areas in the country. Barely,
wheat, oil seeds, sorghum, maize, wheat, oats, beans and peas are major crops produced in large
quantities.
Cash crops such as cotton, sesame,
sunflower, and sugarcane grow in the
vast and underutilized tract of the
Region's lowlands. The water resources
from Lake Tana and all the rivers found
in the Region provide immense potential
for irrigation development. About
450,000 hectares of arable land is irrigable
and suitable, especially for horticultural Figure 1 Map of cash transfer Woredas (Lay Gayint and Tach Gayint)
development.
The Amhara National Regional State is topographically divided into three main parts; namely, the
highlands, mid highlands and lowlands. The highlands are also characterized by chains of mountains and
plateaus. Ras Dejen (4620 m), the highest peak in the country, Guna (4236 m), Choke (4184m) and
Abune Yosef (4190m) are among the mountain peaks that are located in the highland parts of the Region.
The lowland part covers mainly the western and eastern parts with an altitude between 500-1500 meters
above sea level. Areas beyond 2,300 meters above sea level fall within the highland ("Dega") climatic
Zone, and areas between the 1,500-2,300 meter above sea level contour fall within the mid-altitude
("Woina Dega") climatic zone; and areas below 1,500 contour fall within the "Kolla" or hot climatic zones.
The Dega, Woina Dega and Kolla parts of the Region constitute 25%, 44% and 31% of the total area of
the Region, respectively.
The annual mean temperature for most parts of the Region lies between 15°C-21°C. The Region receives
the highest percentage (80%) of the total rainfall in the country. The highest rainfall occurs during the
winter season, which starts in mid-June and ends in early September.

2
http://countrymeters.info/en/Ethiopia (for May 2018)
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 2.1.2. PRODUCTIVE SAFETY NET PROGRAM (PSNP)
The Productive Safety Net Program (PSNP) is Ethiopia’s rural safety net for chronically food insecure
households. The Program covers households in Afar, Amhara, Dire Dawa, Harari, Oromiya, Southern
Nations, Nationalities and Peoples (SNNP), Somali and Tigray Regions, and targets households that are
chronically and transitorily food insecure. The Program provides cash and/or food transfers to these
households. The overall goal of the program is stated as “Resilience to shocks and livelihoods enhanced,
and food security and nutrition improved, for rural households vulnerable to food insecurity.”
Households that have able-bodied adult labor engage in public works (PW) and receive transfers for 6
months of the year. The transfer months are split in to cash and commodity (food) considering long term
trend of food availability/shortage months in the specific Woreda. Public works focus on integrated
community-based watershed development, covering activities such as soil and water conservation
measures, rangeland management (in pastoral areas), and the development of community assets such as
roads, water infrastructure, schools, and clinics. These works contribute to improved livelihoods,
strengthened disaster risk management and climate resilience, and enhanced nutrition. The program
facilitates linkages with health and nutrition services, particularly for pregnant and lactating women who
have antenatal care and nutrition related co-responsibilities (soft conditionality) as they transition to
temporary direct support, but also for public works clients, whose participation in nutrition behavioral
change communication (BCC) sessions counts towards their public works requirement. Households
without labor capacity, permanent direct support clients (PDS), receive 12 months of unconditional
transfers and are linked with social protection services.
The program provides technical assistance and training in livelihood activities (crop and livestock, off-
farm, and employment) to clients to enable households to increase and diversify their incomes and build
their assets. While many clients who participate in livelihoods activities are referred to credit providers,
for the poorest households, the program provides livelihood transfers that do not need to be repaid,
helping them build their assets more rapidly while avoiding a cycle of indebtedness. Together, these
interventions aim to strengthen resilience, improve nutrition, and help households become food sufficient
and, eventually, food secure.3

3
Productive Safety Net Program Phase IV Program Implementation Manual, Ministry of Agriculture, Addis Ababa
Version 1.0

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 2.1.3. RURAL FINANCIAL SERVICES IN ETHIOPIA
1. The formal sources are financial institutions that are set up legally and engaged in the provision of credit
and mobilization of savings. These institutions are regulated and controlled by the National Bank of
Ethiopia (NBE). In the Ethiopian context formal financial sector includes National Bank of Ethiopia (NBE),
commercial banks (owned by private and public), Development Bank of Ethiopia (DBE), credit and savings
cooperatives, insurance companies (both public and private) and microfinance institutions (owned by
Regional governments, NGOs, associations and individuals) (NBE, 2013/14).
2. The numbers of bank branches reached 2208, of which 1003 or about 45 percent belong to the
Commercial Bank of Ethiopia. Despite modest branch expansion, Ethiopia remains as one of the under-
banked countries even at sub-Saharan African countries standard. The bank branch to population ratio
was 1:43,912 in 2013/14. Similarly, total capital of the banking system reached Birr 37.3 billion, of which
about 44.7 percent was hold by Government owned 3 banks. Commercial Bank of Ethiopia accounted
for more than 34 percent of total capital of the banking system (excluding NBE). Yet geographical
distribution of bank branches was highly skewed to major towns and cities. Nearly 34 percent of bank
branches were located in Addis Ababa (NBE, 2013/2014).
3. By the end of 2013/14, the number of micro-finance institutions (MFIs) operating in the country reached
31. Their overall performance was encouraging as their total capital and total asset increased by 24.6 and
38.6 percent and reached Birr 5.6 billion and Birr 24.5 billion, respectively. At the same time, their deposit
mobilization and credit provision have expanded remarkably. Compared to the year (2012/13), deposit
mobilization of MFIs went up by 54.8 percent and reached Birr 11.8 billion while their outstanding credit
rose by 31.9 percent indicating their expanded outreach. The four largest MFIs, namely Amhara credit
and saving institution (found in the study site), Dedebit, Oromiya and Omo Credit and Savings institutions
accounted for 74.9 percent of the total capital, 84.0 percent of the savings, 80.6 percent of the credit and
81.6 percent of the total assets of MFIs at the end of 2013/14(NBE,2013/14).4

2.1.4. MOBILE MONEY IN ETHIOPIA

In 2012, the National Bank of Ethiopia (NBE) issued a directive on regulation of mobile and agent
banking services. Accordingly, only financial institutions that are licensed by the National Bank are
allowed to engage in mobile banking services. Mobile and agent banking service shall be carried out
only within the geographical boundary of Ethiopia and with only Ethiopian Birr. Financial institutions
can carry out mobile banking through their agents as specified in these directives. Where financial
institutions carryout mobile banking services through agents: the financial institution shall be fully
responsible and liable for all actions and omissions of its agent and this responsibility shall extend to
actions of the agent; all transactions involving deposit, withdrawal, payment or transfer of cash from or
to an account shall be made on real time basis and financial institutions shall ensure that agents are able
to carry out real time transactions; agents shall not under any circumstance accept funds from
customers that exceed their prepaid balance with financial institutions; financial institutions shall
automatically debit or credit the account of the agent or customer upon conduct of any transaction

4
https://iiste.org/Journals/index.php/JEDS/article/viewFile/30063/30885

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 that necessitates reduction or increase of the account balance of the agent or customer; a financial
institution shall have a mechanism to uniquely identify each of its agents.
The directive also sets the maximum balance that should be available in a mobile account of a person
with a financial institution at any time at Birr 25,000 and daily mobile banking transaction that involves
debiting of an account by a person with a financial institution shall not exceed Birr 6,000. 5

2.2. ELECTRONIC CASH TRANSFER PROJECT BACKGROUND

2.2.1. PROJECT DESCRIPTION
The United States Agency for International Development (USAID) entered into a cooperative
agreement with FH Ethiopia (FH) to implement a five-year Development Food Security Activities
(DFSA)–TRAIN project in support of the Federal Democratic Republic of Ethiopia’s (FDRE’s) Productive
Safety Net Program (PSNP). This FH-implemented project operates consistently with the bilateral
agreement between the United States and the FDRE. In addition to the food commodities provided to
support the PSNP in seven Woredas of Amhara Region, USAID has also appropriated resources for
cash payments to the beneficiaries of the Productive Safety Net Program. Amhara Credit and Saving
Institution (ACSI) is a private limited liability company registered in the FDRE and represents that it has
the capacity to make disbursements through electronic payment methods. ACSI represents that it has
a license from the National Bank of Ethiopia (“NBE”) to provide financial service through a technology
provider. FH and ACSI agreed that the later to disburse cash to the PNSP beneficiaries via electronic
payment method. ACSI works with M-Birr, the technology provider for cash transfer. The
implementation of electronic payments to PSNP beneficiaries demonstrates the technical, operational
and managerial feasibility of using electronic payment system. This and other banking services, such as
loans or remittances, offered to unbanked rural people can contribute to financial inclusion as it brings
the clients into the financial system.6

The project engaged ACSI to deliver payments electronically to clients in the Productive Safety Net
Program (PSNP) through a mobile payment. ACSI maintained accounts to clients so that clients can have
access to financial service through local agents, in addition to ACSI branches/satellite offices.

5
http://www.nbe.gov.et/pdf/directives/microfinancebusiness/FIS-01-2012.pdf
6
Agreement between Food for the hungry, inc. (recipient) and Amhara Credit and Saving Institution s.c (ACSI) for the
provision of electronic payment service to beneficiaries of the Productive Safety Net Program (PSNP) in Amhara
Region contract #: fh-gmt-18c-004
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 2.2.2. SERVICE PROVIDER
FH Ethiopia started piloting e-payment in Lay Gayint Woreda of Amhara Region in 2017. During the
inception of the project, the only competent Financial Technology Provider in the Region was Kifiya
Financial Technologies- “Kifiya”. Kifiya was implementing cash transfer with ACSI in Amhara Region.
Having been informed about Kifya, FH contacted the company and reached consensus for field
observation on Kifiya’s capacity. Then, FH conducted field assessment at Woredas where Kifiya was
working. The assessment result showed that Kifiya was doing very well but the technology has some
problems. Kifiya responded that the technology drawback was understood and corrective technical
measures are underway. Since Kifiya was working with ACSI, FH requested Kifiya to bring ACSI to a
tripartite agreement. Kifiya delayed this process and cash transfer starting date approached which
stressed FH. USAID came to support when the project implementation was troubled. USAID, FH and
Kifiya agreed to contact ACSI but ACSI refused to take the MFI responsibility when contacted by USAID
and FH. As a result, Kifiya and FH sought another MFI, the RuSaCCos. This also failed because Kifiya
request the RuSaCCos a guarantee deposit which the RuSaCCos couldn’t agree. Finally, USAID allowed
Kifiya to play both MFI and Financial Technology Provider roles which proved successful to transfer cash
to clients despite a number of challenges. FH didn’t advertise the service of both ACSI and Kifiya for
three reasons:

1. ACSI was the only competent and capable huge MFI in the Region
2. Kifiya was the pioneer for Financial Technology provision in the Region
3. Kifiya was already working with ACSI in some Woredas

Selection of Financial Technology Provider was highly debated during planning of second year e-transfer.
FH had preference to continue working with Kifiya for two reasons. 1. The client authentication method
was insurmountable and 2. Kifiya has collected biometric data from most of the clients in the first year
transfer which obviates another registration to a new system. However, this couldn’t work because ACSI
stopped working with Kifiya and preferred to work with M-Birr. Finally, FH signed agreement with ACSI
to implement second year cash transfer while ACSI contracted M-Birr for provision of the financial
technology. USAID has been highly engaged and very flexible through the entire process in first year as
well as second year.

The client authentication and payment technology applied by Kifiya was highly reliant on internet
connections which is intermittent in the implementation Woredas. The technology required Know Your
Customer (KYC) data which include: basic information of the client, client’s picture and finger prints
which was uploaded to the server. The finger print reading apparatus was hardly reading old people’s
finger prints which was one of the causes that delayed transfer. There were cases of old clients who
were denied of their entitlements temporarily due to failure of the machine to read their finger print.
Unlike Kifiya technology, M-Birr uses mobile network and PIN cards instead of internet and finger prints.
This has avoided reliance on internet and the challenges associated with finger prints.

Finally, FH and ACSI entered obligations of both parties to govern the service enabled through the use
of electronic payment systems for three months (January to March) to support PSNP beneficiaries in
three rounds of cash transfers in two Woredas (Lay Gayint and Tach Gayint) in South Gondar zone of
Amhara Region from 2018 through the year 2021. The agreement engages ACSI to deliver payments

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 electronically to beneficiaries in the Productive Safety Net Program (PSNP) through a mobile payment
or Savings Account in the name of the beneficiaries. The account is maintained by ACSI, so that clients
can access to financial service through local agents, in addition to access through ACSI branches.

2.2.3. PROJECT PARTICIPANTS

Each year Government undertakes retargeting for PSNP participants based on the PSNP Program
Implementation Manual (PIM). The participants are categorized into two components: Public Work (PW)
and Permanent Direct Support (PDS) beneficiaries. In 2018 the project participants were 33,108 HHs
(26,878 PW and 6,230 PDS). Total beneficiaries of the project were 99,063 (50,251 Female, and 48,812
Male). Project participant households were paid as per their family size. The PSNP allows a maximum of
five family members per household to access entitlement. A household is mainly represented by the
household head called the client. The client’s name is inserted in the Master Beneficiary List (MBL) and
given a unique PASS (Payroll and Salary System) identification card (ID). PW clients are entitled as per
the labor contribution in the natural resource management projects. Participation is recorded by
forepersons in the field and attendance is developed at the end of each month. A household with only
one able-bodied participant receives Birr 41.00 (equivalent to 1.5 USD) per day for a maximum of five
days/month which makes the monthly income Birr 205.00 (equivalent to USD 8.00). Accordingly, HHs
with 2, 3, 4, and 5 PW participant members receive USD 15.00, 23.00, 30.00, and 38.00, respectively if
they have fully participated in the PW. PDS participants receive the entitlement without conditionality.

2.2.4. OBJECTIVES OF THE STUDY

The study was conducted from June 4, 2018 to July 16, 2018 with general objective: To learn from
evidences and document lessons on mobile cash transfer pilot in the two Woredas of Lay Gayint and
Tach Gayint. Specific objectives were to:
1. Assess effectiveness of mobile cash transfer for PSNP clients
2. Assess client’s satisfaction on the service provided
3. Provide recommendations and document lessons for future e-payment programming

2.2.5. RESEARCH QUESTIONS

To ensure objectives of the study are met and to obtain overall picture of the pilot project, the study
raised a number of research questions listed below.
1. How well was the targeting conducted?
2. How did the cash transfer go regarding timeliness and predictability with respect to PSNP IV
PIM?
3. What were the reasons for not collecting cash on time?
4. Was the transfer method (e-payment) convenient to clients?
5. Was saving encouraged/facilitated?
6. How do clients see e-payment versus the traditional (manual) way of cash transfer?
7. How was the stakeholders’ engagement in the transfer process?
8. Is the community tech friendly for financial inclusion?
9. How does mobile transfer relate with gender?

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3. SCOPE AND METHODOLOGY
The study aimed to understand effectiveness of mobile cash transfer and satisfaction level of PSNP clients
during the three rounds (January to March, 2018) e-payment piloted by FH Ethiopia. The pilot was conducted
in collaboration with Amhara Regional State relevant bureaus and Amhara Credit and Saving Institute (ACSI)
in 2018 in Lay Gayint and Tach Gayint Woredas. The research methodology employed were: household
interview (HHI), Key Informant Interview (KII), Focus Group discussion (FGD) and literature review. Primary
data were obtained from PSNP clients’ HH interview, e-payment steering committee members and Kebele
administrators FGDs and KII. The primary data were complemented with secondary data obtained from e-
payment project monitoring updates on weekly cash transfer, records of cash transfer milestone, Regional e-
payment steering committee minutes, and Government assessment reports. Details of the survey sample size
determination, sampling method, classification of survey participants, research questions, objectives and
limitations of the study are presented below.

3.1. METHODOLOGY
The survey had three layers of sampling frames. 1) The two pilot Woredas of South Gonder namely: Lay
Gayint and Tach Gayint; 2) List of 49 Kebeles7 in the two Woredas; 3) List of 32,838 HHs in the selected
Kebeles-Population size. The survey employed stratified random sampling technique. The primary sampling
unit was Kebele.

 Lay Gayint has 31 Kebeles of which 10 Kebeles were randomly selected.

 Tach Gayint has 18 Kebeles of which six Kebeles were randomly selected in the same manner.

Additional four Kebeles in LG and four Kebeles in TG were considered to interview clients who didn’t
receive cash in both January and February transfers.

For the second stage of sampling, the basic sampling unit was household. Of the total sample size of 354
interviews, 191 (54%) were from Lay Gayint and the remaining 163 (46%) were from Tach Gayint.

Sample size was determined with the population size of 32, 838, confidence interval of 5.5 and confidence
level of 95%8 with online sample size calculator. This computation brings us to fix sample size at 345 including
10% non-response. A total of 354 individual clients were interviewed. Eight Kebele administration FGDs,
two Woreda e-payment steering committee FGDs and a KII were conducted.

The population embraced categories of unpaid clients (those who didn’t receive both January and February
transfers) and paid clients. The paid clients were further stratified to PW (Public Work) participants and
PDS (Permanent Direct Support) clients. PDS participants were 89 (25%) and PW participants were 264
(75%). The ratio of sample size, sampling fraction, was determined on the size of each stratum population.
To represent clients who didn’t collect any cash despite presence of their names in the payroll, additional
eight Kebeles were considered. These clients were identified first from the payroll. The unpaid clients were

7
Ethiopian least Government administrative unit.
8
https://surveysystem.com/sscalc.htm
13
7.9% of the total interviewed clients. From 10-27 clients were interviewed per Kebele depending on size of
PSNP clients. Gender composition of the interviews shows 104 were females and 250 males. Family size of
interview participants were almost evenly distributed.

3.2. DATA COLLECTION AND ANALYSIS

Questionnaire suitable to address the research questions was developed. Quantitative and qualitative
questions were included in the individual clients’ questionnaire; Kebele administrators (3-6 per Kebele) and
Woreda e-payment steering committee FGD questionnaires were qualitative. FH staff (enumerators) in the
two project Woredas were trained on the questionnaire before conducting the interview. Enumerators were
supervised by project staff and completed interviews were reviewed during the data collection period.

The data was analyzed using Statistical Package for Social Sciences (SPSS) version 20.0. Descriptive data
analysis, especially frequency was conducted and obtained results were presented in tables and charts. Open-
ended questions were separately analyzed with Microsoft Excel. Each open-ended question was listed in one
column and responses and their frequencies were placed in front of the questions and data was entered by
adding up on the frequency of the respective response at each instance. When a new response is given by
respondents, two additional columns were added; one for the response and another for the frequency. Finally,
the responses and frequencies for each open-ended question were placed in a separate table for frequency
analysis. Kebele administration and Woreda e-payment steering committee FGDs and KII responses were
included in the findings where appropriate.

3.3. LIMITATIONS OF THE STUDY

 Project participants were selected randomly at commodity distribution sites from each kebeles, Hence,
the study did not use list of all clients for randomization.
 Project staff had to make a home-to-home visit to interview clients who didn’t receive their January and
February entitlements. Responses for clients who have not received cash were given from family
members or neighbors as the clients have left the area or have passed away. In some instances, no
information was found about the client in question.

14
4. RESEARCH FINDINGS

4.1. AMOUNT OF CASH TRANSFERRED

FH planned to transfer US$ 2,238,811.07 to PSNP clients of Lay Gayint and Tach Gayint Woredas in three
rounds (January to March 2018). A total of USD 2,194,426.85 which is 98% of the total was transferred while
this survey was conducted. For a number of reasons US$ 44,384.22 was not yet transferred.

Table 1 Amount of cash transferred through e-payment

Description PW PDS Total

Disbursed cash 1,995,681.07 243,130.00 2,238,811.07
Transferred cash 1,960,123.96 234,302.89 2,194,426.85
Unpaid cash 35,557.11 8,827.11 44,384.22
Achievement (%) 98% 96% 98%

4.2. PSNP CLIENTS’ PARTICIPATION ON CASH TRANSFER

The maximum number clients planned for transfer was observed in March (third round transfer). The
variation in number of planned clients comes from the varying number of PW attendees in each month while
the number of PDS clients is constant. The highest number of clients who received their cash was observed
in January transfer. ACSI arranges cash transfer schedule, agrees with WFSP and clients withdraw their cash
from ACSI offices as per the schedule. However, clients delay withdrawing their cash after the scheduled
period for many reasons which is discussed in Section 4.3, Timeliness and Predictability of Transfers.

Table 2 Number of clients reached through mobile cash transfer

January February March

Description
PW PDS Total PW PDS Total PW PDS Total
Planned 26,595 6,230 32,825 26,610 6,230 32,840 26,606 6,230 32,836
Achieved 26,225 6,015 32,240 25,753 5,998 31,751 25,912 5,954 31,616
Achievement 99% 97% 98% 97% 96% 97% 97% 96% 96%

Summary Box 1.
Overall cash transfer in this year was effectively conducted in terms of the amount of cash transferred
and clients reached. ACSI has transferred 98% of the amount of cash to legitimate clients. The cash was
transferred to 98% of the clients. The achievement shows mobile transfer piloting can be a modality of
cash transfer in the project areas. The fact that the project couldn’t exceed more than 98% of the cash
could be attributed to the stringent authentication method which obviated illegitimate withdrawal.

15
 4.3. TIMELINESS AND PREDICTABILITY OF TRANSFERS
The PSNP IV Program Implementation Manual (PIM) states that transfers can be considered predictable
if PSNP clients have knowledge on: 1) their eligibility for the program, 2) type of transfer they will
receive, 3) how much of this transfer they will receive and 4) when they will receive it. A transfer is
timely if it is provided to clients before or at the time during the year when they need the support. A
timely transfer also takes place according to a planned transfer schedule. According to the PIM, monthly
cash transfer has to be completed within 20 days of the next month.9

In this year cash transfer was delayed from its start and there was subsequent delay in each month.
Delay in starting this year transfer emanated from contracting Financial Service Provider (FSP). Amhara
Credit and Saving Institution (ACSI) was the FSP contacted. Many discussion sessions went before
reaching agreement with ACSI.

Woreda Food Security Process (WFSP) was not submitting attendance in the specified period (on the
28th of the month), FH prepares payroll based on the attendance received from WFSP but there were
occasions of mismatch between soft and hard copy of the payroll. Corrections made required
transferring additional cash to ACSI account. This back and forth consumed some time above the already
delayed schedule. ACSI has also contributed to already delayed transfer by late start of transfer after
funds have been released from FH consuming longer duration of transfer. These challenges have been
tackled every month and overall acceleration was recorded to ensure lessons are taken in to account
to make future transfers much better than this year.

In ideal case, the entire process of a single transaction of paying for a client takes two minutes. However,
in the first few weeks the transaction took much longer time due to intermittent mobile network and
lack of cashier experience. Consequently, a cashier was able to pay only 60-80 clients per day. With
improved mobile network and cashiers’ experience, a cashier was able to pay up to 300 clients per day.

At the start, the project expected to complete January transfers on February 27, 2018. However, it
started on February 27, 2018 in Tach Gayint and on March 05, 2018 in Lay Gayint. As it is evident in
the Table 3 below, the average overdue of cash transfer for January, February and March has been 19,
30, and 43 days, respectively. If we consider the first month transfer as normal starting point for this
year transfer, February transfer has been overdue by 11 days and that of March by 13 days.

9
Productive Safety Net Program (PSNP) Phase IV Program Implementation Manual (PIM)
16
 Table 3 Analysis of time taken for each step of cash transfer process

Transfer Months Mean

Activity Description duration
January February March (days)
Attendance submission overdue (days) 11 6 14 10
Payroll preparation duration (days) 6 6 8 6
Payroll verification duration 2 3 4 3
Duration cash request to transfer to ACSI (days) 7 15 24 15
Cash transfer to ACSI to start of cash transfer to clients
(days) 3 11 6 7
Cash transfer duration (days) 13 12 10 12
Overdue for cash transfer as per the PIM (days) 19 30 43 31
No of days from receiving payroll to completion of
transfer 31 46 51 43
Number of days from attendance submission to
completion of transfer less attendance overdue 20 41 37 33

Investigating the root causes of such delayed transfer reveals that the average number of days elapsed
between receiving attendance from WFSP and completion of transfer to clients for January, February
and March is 31, 46 and 51 days respectively. Attendance ought to be submitted to FH on the 28th
of each month so that transfers will be completed on the 20th of the next month. However, WFSP
attendance submission to FH was ten days overdue on average. Payroll preparation by FH and
verification by ACSI took fairly acceptable time. Cash transfer from FH to ACSI was highly delayed
(average 15 days with a minimum 6 and maximum 38 days). The maximum delay of cash transfers to
ACSI happened during March cash transfer to Tach Gayint. FH was curious on getting official report
from ACSI on how the transfer went in January and February before transferring March cash to ACSI
and demanded an official report from ACSI. Observing ACSI’s limitations on getting the data and
subsequent unintended time consumption, FH finally decided to release the cash. ACSI was not
starting transfers immediately upon receiving cash from FH despite the timely disbursement to
clients’ mobile accounts. ACSI had to take an average 7 days with minimum 3 and maximum 11 days
between receiving cash from FH and starting transfer to clients. The maximum days recorded was
during February transfers when ACSI was not in a position to start transfers due to finance closing
especially in Tach Gayint. As per the scheduled transfer days, cash transfer to clients took an average
of seven days with a minimum four and maximum 16 days. It was agreed that ACSI shall complete
transfers simultaneously in all Kebeles within six days except for January transfer which was delayed
at the start. It was agreed to start January transfers on February 16 and complete on February 27.
However, attendance for January was submitted on February 16 in LG and February 15 in TG.
February and March transfers were challenging in the same manner.

Transfer was predictable since every legitimate client coming to ACSI satellite offices with the PIN
card and client PASS card received entitlement except the delay. There were a number of discussions,
phone calls, field visits and letter issuing in the process in an effort to keep timeliness. The Woreda
and Regional e-payment steering committees have been regularly meeting and discussing challenges
and providing mitigations. Weekly transfer amount for each round was recorded and presented in
Figure 2 showing improving duration every month. The vertical axis shows percent of cash
transferred and the horizontal axis shows weeks of transfer. Improvement on duration is evidenced

17
by the slope of the curves for each month. March transfer slope is steep (a few weeks required to
reach maximum transfer compared to January which was slowly progressing). This is the key to
indicate possibility of improved timeliness in the future.

Weekly cash transfer progress

100
90
80
70
60
50
40
30
20
10
0

LG and TG January Average LG and TG February Average

LG and TG March Average LG and TG Overall progress

Figure 2 Weekly progress of cash transfer in the three rounds

Quantitative data obtained from interviewed clients corroborates with the above findings.
Respondents complained poor mobile network in January transfer (2) and generally reflected as “it
consumes much time” (23).

Mobile network was limited due to the nationwide political tensions during January transfer (which
was conducted in March), later it was improved following relative peaceful situation. ACSI had only
one cashier and one mobile apparatus per satellite office when the transfer commenced. This was
improved to two cashiers and two mobile phones per satellite office. FH supplied ACSI with 23 cell
phones distributed to the newly recruited ACSI field staff. These measures contributed to the
betterment of the cash transfer duration in the following months.

Summary Box 2.
Cash was not transferred timely as per the PIM. All implementing partners were responsible for
the delay. Some of the reasons were: delayed contract with ACSI, delayed attendance submission
from WFSP, incorrect payroll preparation by FH, and delayed cash transfer by FH, delayed cash
transfer activity by ACSI and poor mobile network. Awareness of clients on the six months’ time
for collecting their cash has contributed to delayed transfer. Transfer was predictable as per the
PIM as legitimate clients have received their entitlements.

18
 4.4. HOW WELL WAS THE TARGETING CONDUCTED?

It has been customary to start certification (targeting) process at the community level and then
sending list of selected individuals to Kebele Food Security Task Force (KFSTF). The KFSTF analyzes
the list, includes corrections (such as replacement on those who have passed away, permanently left
the Kebele, and moved from PW to PDS or vice versa); then the KFSTF presents the result to Kebele
residents for feedback. In previous years, some KFSTFs were spreading the quota to all residents
while they were expected to do full family targeting with the Government cap of five family members
per household. This was corrected in 2018 targeting. After Kebele residents provided feedback on
the list, it is endorsed by KFSTF and sent to Woreda Food Security Task Force (WFSTF) for
endorsement. WFSTF endorses and produces Woreda level Master Beneficiary List (MBL). The
endorsed MBL is communicated to the Kebele. Kebele FGD informs that WFSTF sometimes changes
PW and PDS ratio before endorsement of the KFSTF targeting. Quantitative survey result informs
that from 349 respondents 273 (78%) participated on targeting either as a committee member or a
client gathered to give feedback on the selected clients. Survey participants were asked why they
were selected as a PSNP client. Responses are presented in Figure 3. The primary reason for selection
was lack of household assets followed by having no land and being unable to build asset for various
reasons. It is important to note here that some have been selected because they are physically
disabled or lost their parents.

Targeting criteria as per survey participants

Total 316

Disabled 4

Double orphan 1

No asset 219

Weak 54

Landless youth 5

I am landless 33

0 50 100 150 200 250 300 350

Figure 3 Survey participants response when asked why they were selected for PSNP

From 346 respondents 276 (close to 80%) confirmed that the selection process was transparent
while the rest 70 (nearly 20%) do not believe that targeting was transparent and needs improvement.
Survey participants were asked how targeting should be improved. Request for full family targeting
held the major share. Survey participants requested also for more community participation and
functional complaint redressing mechanism. Many PW participants were complaining to have been
wrongly placed to PW while it is evident that they are weak to work in the field.

19
 Survey participants' suggestion to improve targeting

Total 121

Must stop misinforming the community on the quota 1

Correclty place clients to PW/PDS 13

Functional complaint redressing mechanism 18

Should not be rework on the names of clients after
approval
2

It has to be full family targeting 67

Improve community participation 20

0 20 40 60 80 100 120 140

Figure 4 Survey participants' suggestion to improve targeting

Woreda e-payment steering committee FGD shows that transparency of targeting has been achieved
through Woreda FS staff involvement during the targeting process at Kebele. Names of targeted
individuals was read aloud to gathered clients so that they can accept or reject the person in question.
While the Woreda e-payment steering committee and Kebele administration FGDs informed that all
Kebeles have called PSNP clients to participate on feedback, quantitative data obtained shows out of
342 respondents 289 (85%) have participated on the feedback process whereas 53 (15%) didn’t
participate. Kebele administrators blame clients for not gathering during feedback provision. No
Kebele administration or client mentioned on the practice of posting the final approved list of clients
at Kebele.

Kebele administrators, spokespersons and managers are the three members of complaint redressing
committee across the interviewed Kebele administration FGDs. All FGDs with Kebele administration
informed that Kebeles have functional complaint redressing committees. The committees have
addressed complaints coming from PSNP clients such as targeting and graduation problems. Others
have solved problems related with assigning clients as PDS/PW, delegation, and lost PIN cards.

Summary Box 3.
Targeting was conducted as per the PIM with priority to community members with no assets.
People with physical disability and landless youth were considered but PW/PDS assignment was
source of complaint. Clients requested practice of full family targeting. Complaint redress
mechanism is operational but needs further work on raising awareness among the community.

20
 4.5. REASONS FOR NOT COLLECTING CASH
The January to March 2018 cash entitlements were supposed to be transferred from February to
April. However, actual transfers were made from March to July 2018. ACSI was making bulk
disbursement to clients’ individual mobile accounts. Weekly reports were sent to FH and
Government on transferred cash amount and number of clients who have received their cash.
Despite the efforts made, considerable number of clients didn’t collect their cash at all. Project and
Government stakeholders have been concerned why the clients didn’t collect their entitlements
while it is generally accepted that these clients are targeted as the poorest and chronically food
insecure community members.

Seventy-six unpaid clients/HHs were asked why they didn’t collect their entitlements. Survey
participants raised 18 reasons of which the five most frequent reasons were; death of client (16),
client leaving the Kebele permanently (13), client names not known in the Kebele (9), sickness (8)
and client couldn’t delegate (7). Figure 5 shows FH survey results on reasons of clients for not
collecting cash.

FH survey: Top five reasons why clients didn't withdraw cash from ACSI.
16
16 13
14
12 9 9
10 8 8
7 7 7
8 6 6
5
6 3
4 1 1
2
0
Death of client Left the area Not known in Sickness Couldn't
permanently the kebele delegate

LG TG Total
Figure 5 Top five reasons why clients didn't withdraw cash from ACSI branch offices (FH survey)

Secondary data obtained from LG Woreda FS details 14 reasons why clients didn’t collect their
entitlements. Five most frequent reasons were: death of client (38), sickness/weakness (33), client
left the Kebele permanently (23), client left the Kebele during the transfer period (14), and client
didn’t delegate (13). Other infrequent reasons were; no one is known by the name in the payroll,
name of the client has been entered twice, mistaken name, client couldn’t bring client card, and client
preferred later withdrawal. Government staff couldn’t find some of the clients during their
assessment and hence couldn’t know why these clients didn’t withdraw cash. Further investigation is
required about clients who were not found in the Kebeles. Figure 6 shows LG Woreda FS assessment
result on why clients didn’t collect their January and February entitlements.

21
 LG Government assessment result on reasons for clients
not collecting cash
38
33
40
23
30
14 13
20
10
0

Figure 6 Lay Gayint Woreda assessment result on reasons why clients didn't withdraw cash

4.6. CONVENIENCE TO CLIENTS

In order to assess convenience of the transfer method to clients, the interview involved questions
regarding relative distance of clients’ residence from ACSI’s pay stations versus the previous payer,
Finance Office. Walking distance was expressed in hours. Other questions were; how calling different
family size clients in different days (rather than gathering all Kebele clients in one day) affected the
clients, and ACSI cashiers’ client handling. From 288 respondents on the relative distance of finance
and ACSI pay stations, 121 (42%) responded ACSI payment station was farther than the location
Finance Office was paying. For 117 (41%) of the respondents, Finance Office pay station was farther
than ACSI’s pay station. For the rest 50 respondents (17%) both Finance Office and ACSI were in
fairly equal distance from their location. Clients were also asked on how long it takes for them to
reach ACSI pay stations. Among the 288 respondents, 148 (51%) travel below one hour, 94 (33%)
between 1-2 hours, 21 (7%) between 2-3 hours and 25 (9%) travel more than three hours. ACSI is
paying clients at satellite offices and branch offices. ACSI uses 8 satellite offices and 2 branch offices
to pay clients in 16 Kebeles in TG. Considering two cashiers at one satellite office, clients in 10
Kebeles have consistent access to ACSI offices while clients from 6 Kebeles will be forced to travel
out of their Kebeles to collect their entitlement once they lose the chance when satellite offices
comes to their Kebeles and complete transfer for the month. In the same way LG uses 9 satellite
offices and 5 branch offices with a total of 14 offices leaving the rest 17 Kebeles to access ACSI offices
only on the pay days. If clients do not collect their cash in those days, they will be forced to travel
out of their Kebeles to collect their entitlement. Finance Office was paying clients in each Kebele.
ACSI has agreed in the contract to assign one cashier for every 300 clients. But, cashier/client ratio
was 1:804 for TG and 1:607 for LG. This has tremendous impact on timeliness of transfer and causes
much waiting at satellite offices.

The huge number of PSNP clients per Kebele demands coordination strategy for good client handling.
Table 4 shows client statistics for the two Woredas.

22
Table 4 Summary of client load per Kebele in LG and TG Woredas

Minimum Maximum
Mean number number of number of
Number of of clients per clients per clients per
Woreda PSNP HHs Kebele Kebele Kebele
LG 17,012 548 76 1,187
TG 16,096 894 372 1,577

Considering the high number of clients per Kebele and only two cashiers per satellite office, ACSI
used to call clients according to their family size. Meaning, ACSI, for example, calls clients with family
size 1 and 2 in the first day; 3&4 the second day; and 5 and all PDS clients on the third day. This
arrangement was highly debated by stakeholders. Survey result, however, shows that from 259
respondents 209 (81%) were in favor of calling by family size while 50 (19%) were against. From those
respondents who were in favor of calling by family size 94 responded it is swift while 28 expressed
the same saying it avoids long queue. From those who were against calling by family size 22 justified
their response saying it takes longer days while 9 respondents were concerned with separation of
neighbors on their travel to the satellite offices.

When asked about ACSI cashiers’ client handling, from 286 respondents 254 (89%) praised ACSI for
good client handling while 32 respondents (11%) have faced some kind of mistreatment from ACSI
staff. Arrangement for official delegation at Kebele Social Justice was appreciated for its nearness and
obviating cheating. Gathering clients according to family size was also appreciated for swift payment
and avoiding long waiting. Previously, any client who would like to delegate had to travel to the
Woreda Justice Office and pay Birr 55 (estimated US$ 2) for the service. This was very tedious for
the PDS clients who are very weak to travel and any payment to receive PSNP cash is against the
core PSNP principle.

Passing information on the dates and places of cash transfer were one of the major and important
tasks. Woreda FS process, Kebele administration and ACSI were involved in communicating the
transfer dates to clients. In most cases information was passed correctly and timely to clients.
However, 37 clients have reported they missed the transfer dates only because they were not
informed.

Summary Box 4.
Death of clients and leaving area of residence permanently were the two major reasons for
clients not collecting their entitlements. There were significant number of clients with their
names not known by residents. A number of clients didn’t collect their entitlements only because
they couldn’t delegate for some reason.

Clients benefited from delegation at Kebele Social Justice. ACSI’s use of only two cashiers at
satellite offices, poor mobile network, ACSI’s dependence only on its satellite offices/branches
has caused longer duration of transfer. Forcing clients to gather out of their Kebele has caused
clients to travel more than three hours for considerable number of clients.

23
 4.7. WAS SAVING ENCOURAGED/FACILITATED?
E-payment provides two levels of saving opportunity to PSNP clients. First, clients can intentionally
delay withdrawal after cash is disbursed into their mobile accounts. Second, to use the saving
opportunity ACSI has arranged along with cash transfer through opening account with ACSI. ACSI
provides 7% compound interest at the end of each month. Clients can withdraw their monthly
entitlement and save a certain amount into their ACSI branch accounts. From 285 respondents 198
(69%) have used saving opportunity arranged by ACSI while 87 (31%) were not saving. Figure 7 shows
Survey participants’ reasons for not starting saving at ACSI.

Clients' reasons for not starting to save at ACSI

Total 82
Lost account book 1
Saving in other finance institute 11
Spent for medication 1
Aged 2
No information on the opportunity 14
Money is used for daily needs such as food 53
0 10 20 30 40 50 60 70 80 90

Figure 7 Survey participants reasons for not starting saving at ACSI

Respondents were asked why they didn’t start saving. The most predominant reason was the amount
they earn every month barely meets their daily needs. Some replied they do not have information
on the opportunity of saving. A few more replied they are saving at other FSP such as RuSaCCOs
and CARE Ethiopia project. Though there were reports of involuntary saving, virtually all the clients
have been convinced about the relevance of saving and saved a minimum of 25 birr/month. The
cumulative weekly saving report obtained from ACSI is shown in the following Table 5.

Table 5 Amount of cash saved and number of clients who saved in ACSI
Account with ACSI No of HHs saved Amount saved
Existing 7,512 1,253,821.00
New 688 122,240.00
Total 8,200 1,376,061

Summary Box 5.
Saving was encouraged and facilitated. Many of the clients have started saving at ACSI. The major
reason for not saving was the cash transferred couldn’t exceed their daily basic needs.

24
 4.8. GENDER PRESPECTIVE OF MOBILE CASH TRANSFER
Participation on targeting, clients’ mobile ownership, literacy level of clients, impact of calling clients
by family size, and use of saving opportunity were separately analyzed through cross tabulation to
study gender perspective of the mobile cash transfer pilot. From the total of 354 interviewed clients
104 were female participants and the rest 250 were male participants.

The overall findings illustrated the opportunity to benefit from e-payment and receive better service
of PSNP is skewed to male clients. While 81% male respondents participate on targeting, only 67.3%
female respondents were present at the targeting feedback. Mobile ownership is 18% for males while
13% for females. Literacy level of respondents is depicted in Figure 8. Except for those respondents
above grade eight, the data shows female literacy level is lower than the males.

Literacy level by gender

100%
80%
80% 70%

60%

40%
17%
20% 11% 10% 6% 3% 3%
0%
Illiterate Grade 1-4 Grade 5-8 Above grade 8

Male Female

Figure 8 Literacy level of PSNP clients segregated to gender

To match the number of clients who receive their entitlements per day with the number of cashiers
and their maximum number of clients they can serve, client cash collection schedule was based on
family size. While 64% of male clients were in favor of the schedule, only 48% of the females were
happy with the arrangement. The female participants were pleased with the speed of payment once
they reach the pay station. However, the arrangement separates them from their neighbors as they
may have a different family size and may not be called in the same day. Male HHs used the saving
opportunity than females (60% male and 47% female). This could be because the females are highly
in touch with the household daily needs preventing them from saving some amount from what they
earn. This needs further study, anyway, to come to conclusion and support the female participants
to use the saving opportunity provided by the project.

Summary Box 6.
Female PSNP clients are low in literacy and have lesser rate of mobile prescription compared
with their male counterparts.

25
 4.9. STAKEHOLDERS’ ENGAGEMENT
The stakeholders for the e-cash transfer pilot under study include: USAID (the donor), FH (INGO
implementer), Government (at Regional, Zonal, Woreda, and Kebele levels).

4.9.1. STAKEHOLDER RESPONSIBILITIES

FH

 Coordinate the implementation of the project in Amhara Region and enable targeted PSNP
beneficiaries to directly receive their transfer on their ACSI account to allow each beneficiary to
transact with the digital e-payment system directly from their accounts with ACSI.
 As a preparatory work FH provides ACSI with Woreda maps such as number of
beneficiaries/households in each Kebele segregated to PDS and PW, data on each PSNP beneficiary
from Woreda Food Security Process, from the PASS-database, or other sources. Records of each
PSNP household had a unique PSNP number that matches the number on the PSNP card.
 During implementation of electronic transfers, FH provides the full cash value for monthly transfers
to all eligible PSNP beneficiaries plus the value of the e-payment transfer commission of Birr 10.00
per transaction based on the payroll list prepared each month.
 Facilitate and ensure that payroll data and wire transfers are sent to ACSI based on attendance
submitted from WFS process.
 Ensure the convening and proper functioning of the Woreda Steering Committee, assuring that
Woreda Food Security Process (WFSP) and FH communicate and announce gathering clients to
payment places on the announced dates.
 Participate in Regional E-payment Steering Committee meetings regularly.
 Regularly receive and maintain weekly update from ACSI with the number of enrolled beneficiaries
for electronic payments, and amount transferred.
 Strengthen ACSI’s institutional capacity to implement the cash transfer program through provision
of 23 cellphones, two laptops and two motorbikes.

ACSI

 As a preparatory work ACSI’s responsibility was to identify and recruit satellite office staff, conduct
awareness and sensitization meeting with beneficiaries and local community leaders;
 Identify, recruit and train agents/own branch and satellite office staff, in consultation with WoFEC
and Woreda Food Security Process (WFSP).
 Properly identify and assign two cashiers per satellite office to maintain the ratio of agent/satellite
office staff to PSNP households at 1:300.
 Enroll all PSNP beneficiaries in the respective Woredas by opening savings accounts through
informing beneficiaries about account usage and conditions.
 Provide all necessary documents and materials (e.g. passbook, PIN cards, etc.).
 Ensure that electronic enrollment reaches 100% of PSNP beneficiary households in the Woredas.

26
  Impart appropriate skill and knowledge of recruited agents to optimize the benefits of the e-payment
platform.
 During the electronic transfer, ACSI receives bulk payment from the FH partner bank for fund
transfer for all enrolled PSNP beneficiaries.
 Receive Payrolls from FH, indicating for each PSNP household, the PSNP number, client name, and
amount to be transferred into the beneficiary’s account.
 Transact the crediting to the clients’ mobile accounts according to the payroll within three days of
receiving the payroll.
 Ensure that all beneficiaries are able to withdraw any amount at any time from their own saving
account once the amount is credited to their accounts;
 Complete crediting entitlement amounts to each beneficiary within twenty days after the end of the
preceding month in accordance to the PIM.
 Provide support in creating payment schedules during Woreda Steering Committee meetings in
collaboration with FH and Woreda Food Security Process.
 Ensure each Satellite Office and ACSI branch office is operated at least four days per week, and on
market days in addition to the payment schedule with a capacity sufficient to transact all beneficiaries
without excessive waiting or queuing.
 Allow beneficiaries to have access to their accounts at any time at ACSI branches and satellite offices
or agents with the potential to pay out all PSNP clients within five days after the cash is transferred
to ACSI by FH.
 Use double authentication process; PSNP client card plus PIN code.
 Encourage the saving habits of beneficiaries and enhance their access to financial services, savings
accounts to be issued to all beneficiaries. Beneficiary accounts to be interest-bearing.
 Provide up-to-date information to FH about electronic payments to beneficiaries and the available
cash balance at the end of each month.
 Provide detailed and summary financial reports to FH within 15 days of each round payment
completion and provide original, signed, stamped payment documents to FH for internal use and
audit purposes.
 Collaborate through anonymous data sharing, in analysis or research about the beneficiaries, the
operations or coordination of the activities for the benefit of the electronic payments project and
future expansion.

Government

 Regional FS bureau establishes and chairs Regional e-payment steering committee.

 Execute higher level decisions and oversight of the electronic transfer project.
 Woreda Agriculture Office chairs Woreda e-payment steering committee where FS process is a
member.
 WFS leads the annual recertification process and produce the Master Beneficiary List (MBL)
attendance and submitted to FH.
 WFS announces cash transfer schedule to Kebele administrators, monitors the transfer and reports
to Zonal FS.
 Kebele administration announces cash transfer schedule to clients, manages complaints.

27
Whereas roles and responsibilities of stakeholders have been as detailed above, strengths and weaknesses of
each is presented below.

4.9.2. STRENGTHS OF STAKEHOLDERS

Government

 Regional FS bureau regularly conducted e-payment steering committee meetings.

 Regional FS bureau solved the challenge to give authority to Kebele Social Justice for delegation.
 Zonal FS monitored cash transfer and led unpaid clients’ assessment.
 Woreda FS conducted unpaid clients’ assessment.

FH

 Established Regional and Woreda e-payment steering committees

 Regularly participated on the arranged e-payment steering committee meetings
 Coordinated the transfer and conducted field monitoring
 Conducted e-payment project effectiveness and client satisfaction survey for learning and
documentation
 Timely supplied ACSI with 23 mobile phones and 2 laptops

ACSI

 Provided awareness sessions on e-payment in all Kebeles

 Saving was highly encouraged and facilitated
 Conducted awareness session to Kebele DAs and Administrators
 Timely disbursed cash to clients’ mobile accounts.
 Participated on Regional and Woreda level steering committee meetings

4.9.3. GAPS OF EACH STAKEHOLDER

FH Gaps

 FH didn’t transfer March cash to ACSI timely expecting ACSI to provide list of clients who didn’t
collect their January and February entitlements.
 FH didn’t provide ACSI the two motor bikes as per the agreement due to lengthy international
procurement process.
 FH delayed the one-time-off installment to ACSI.

ACSI Gaps

 Cashiers were not experienced and some are not technically capable. ACSI has later mitigated
through training the cashiers.
 Number of cashiers at the payment stations were not enough to pay to clients without causing long
waiting/queue. ACSI has increased the number of cashiers but still needs improvement.

28
  ACSI didn’t have any means of transport to Kebeles that are inaccessible by public transport. Hence
ACSI was dependent on FH vehicles to reach these Kebeles.
 ACSI didn’t provide FH with signed and sealed bulk disbursement report monthly as per the
agreement.
 PIN cards were not printed for many TG clients.
 Cash transfer to clients was not completed as per the monthly agreed schedule.
 During cash transfer period, ACSI cashiers were given multiple tasks such as collection of loan given
for agricultural inputs.
 In some Kebeles ACSI cashiers forced clients to save.
 ACSI didn’t work with agents. There were no visible efforts made by ACSI to work with agents.
 ACSI’s satellite offices are not found in each Kebele. Each satellite office is working for more than
one Kebele and hence forcing clients to move out of their Kebele center to collect cash.
 ACSI cash transfer updates were inconsistent. The updates were not sent timely especially from LG.
 ACSI staff were not recording full information on client cards during cash transfers.

Government Gaps

 Targeting problems such as insertion of new clients in the middle of the year, family size on the client
card not identical with the MBL information, and moving clients from PW to PDS or vice versa.
 Woreda e-payment steering committee failed to regularly conduct the weekly meetings as per the
direction given from the Regional FS.
 Woreda FS taskforce didn’t conduct frequent field monitoring on the e-transfer.
 There were times announcement for cash collection was not made to clients.
 Attendance was not timely submitted especially in LG Woreda.
 Lack of client card at the start of the program. After client card was printed, Woredas didn’t
immediately distribute to Kebeles. A number of client cards were found at Kebeles not distributed
to clients. Woredas were using temporary client cards. Some of the client cards didn’t have Woreda
stamps which was difficult to consider legitimate.
 Lack of commitment by the Kebele leadership to send message to the beneficiaries to collect cash
 In some Kebeles delegation by people with different types of disabilities and the elderly did not take
effect in full due to limited commitment of the Kebele leadership for unknown reasons.

Community level Gaps

 Some PSNP clients lost their PIN cards and/or client cards
 Poor handling of client cards
 Late show up at cash transfer sites which leaves cashiers idle in the morning and busy in the afternoon.
 Do not bring complaints to the attention of complaints redress committee due to either lack of
awareness or trust on the committee
 Do not gather when called for feedback on selected beneficiaries
 On spot collection of different contributions such as Health Insurance which forced some clients not
to show up on time for cash collection especially at the initial stage of the cash distribution

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 Summary Box 7.
Coordination was made possible through FH initiated Woreda and Regional level e-payment steering
committees. Stakeholders have known their respective roles and responsibilities through multi-tier
awareness raising sessions. Each stakeholder has been executing tasks and fulfilling responsibilities.
However, there were gaps in each of them. Coordination was well executed by the Regional e-payment
steering committee through regular meetings and passing decisions, and follow up of the progress.
Woreda e-payment steering committee meetings were not fully conducted and they were not supported
with regular field observation and feedback.

4.10. CLIENT SATISFACTION WITH E-PAYMENT

Clients were asked how they see e-payment (2018 transfer) against manual way (2017 for TG and 2016 and
before for LG). From 283 respondents 238 (81.4%) were pleased with this year cash transfer scheme. They
explained the benefits as shown in Figure 9 below.10

Reasons of clients to be in favor of mobile cash transfer

Total 411
Paid at our vicinity 75
Saving is made possible 52
Regularly and accurately receive cash 55
Good customer handling 10
Can collect money any time 72
Payment is swift 70
Nobody takes our money 77

0 50 100 150 200 250 300 350 400 450

Figure 9 Survey participant clients' reasons to be in favor of mobile cash transfer

This year transfer has not been good in their sight for 44 (15.5%) respondents. Reasons for their
dissatisfaction were; in the traditional way they were receiving two-month entitlement in one month (2), it
takes more time waiting for mobile network (25), ACSI cashiers have poor client handling (4), and separates
neighbors on payday due to calling by family size (2). When cash was transferred through Finance Office,
clients who could not come to pay stations were not required to officially delegate. This avoided the drudgery
of official delegation but on the other hand opened the room for cheating entitlements of clients. To mitigate
this challenge, it was required for unable clients to officially delegate during e-payment. Woreda Justice Office
was the only authorized entity to endorse delegation in previous years. This caused Justice Office staff to
travel to each Kebele or clients to travel to Woreda center. Clients were also required to pay Birr 55.00
(USD 2.00) for the service which is against the PIM. This was solved by allowing the Kebele Social Justice to
take the responsibility. Kebele Social Justice is easily accessible to clients. The survey inquired clients on their

10
The number of reasons is above the number of respondents because a respondent can give more than one reason.
30
reflection about the delegation process. The primary reason for their satisfaction was the opportunity for
delegation followed by prevention of cheating.

Benefits of delegation at Kebele Social Justice

Total 225

Saves cost 2

No cheating 36

Delegation is given at kebele level 20

Trustworthy delegates can collect the money for the… 167

0 50 100 150 200 250

Figure 10 Survey participants response on benefits of delegation at Kebele Social Justice

Following expression of their impression on this year transfer 82 (29%) out of 279 survey respondents sought
some sort of change should be made to improve quality of transfer while 197 (71%) of the respondents were
satisfied with the quality of delivery. The improvement areas suggested by survey participants were captured
in Figure 11below. As clients were frequently told to be patient until mobile network allows cashiers to give
service, the prominent area of improvement suggested was to improve mobile network followed by request
to stick to schedule as per the PIM and after announcing the date to gather clients for payment.

Clients' suggestion to improve mobile cash trasnfer

Total 106
Stick to schedule 15
Improve network 65
Improve customer handling 1
Stop forced saving 7
Increase cashiers 6
Pay at sub-kebele (Got) level 2
Pay at the kebele 8
Preferred to pay us all three months payment at once 2

0 20 40 60 80 100 120

Figure 11 Survey participants' suggestion on areas of mobile cash transfer improvement

Finally, survey participants were allowed to reflect on their satisfaction level on current mobile transfer
scheme. The result shows high variation among Kebeles. Overall response suggests clients are satisfied with
the mobile transfer. This satisfaction doesn’t exclusively emanate from the benefits of mobile transfer, rather,
the weakness of the manual transfer as well. Many survey participants were against mobile transfer because
of the delegation process, long queue, returning home without receiving their payment due to mobile
network failure, cashiers’ inability to pay as much client per day as required. Some cashiers were not serving

31
clients eight hours a day. They come to satellite offices late and go back early. Amid all the challenges they
faced, clients preferred e-payment for Kebele level delegation, avoidance of cheating and opportunity for
deferred withdrawal.

Clients' satisfaction level with the overall cash transfer

Very low
3% Low
7%
Very good
16%

Satisfactory
35%
Good
39%

Figure 12 Survey participants satisfaction level on mobile cash transfer

Summary Box 8.
Despite all the challenges and some inconveniences on the transition from manual transfer to e-payment,
clients were satisfied with the e-payment mode of transfer for its avoiding cheating, availing the cash for
clients to withdraw any time, and nearness of payment station after missing the transfer schedule time.
Clients repeatedly requested for improved mobile network.

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 4.11. SCALABILITY AND FINANCIAL INCLUSION11
Mobile cash transfer is easier and effective among tech-friendly communities. While mobile cash transfer was
selected as the distribution mechanism for its presumed security, transparency, and efficiency benefits,
attainment of financial inclusion is also one of the benefits of the project. Information on mobile phone
ownership and literacy level were gathered to
assess how tech-friendly the PSNP clients are Literacy level of PSNP clients
and how it would affect scalability and financial Above
Grade 5-8
inclusion. Among 347 respondents only 59 9% grade 8
(17%) own mobile phone. The rest 288 (83%) Grade 1-4 3%

do not own phones. Literate people are more 15%

likely to use mobile phones than illiterates as
using phones requires minimum literacy. Clients Illiterate
were asked about their literacy levels. Figure 13 73%
shows that 73% of the respondents are illiterate
which calls full benefits of mobile cash transfer
into question. In this year ACSI was not able to
work with agents. ACSI staff entered PIN codes
of clients in their own mobile apparatus (proxy
approach), do authentication through client Illiterate Grade 1-4 Grade 5-8 Above grade 8
card which holds portrait of the client (issued
to PSNP clients upon enrollment into the Figure 13 Literacy level of survey participants
program) and finally pay. Clients are not keeping
their PIN codes secretly. This leaves clients highly dependent on ACSI staff to cash out their entitlements
and makes difficult to realize full benefits the technology offers. PSNP clients ought to cash out at agents
which requires them to know their PIN numbers with four digits.

Summary Box 9.
Full benefit of mobile cash transfer was not realized. All clients used ACSI cashiers’ mobiles. PIN codes
were open for ACSI cashiers. Clients must sign on payroll which nullifies the option for cash withdrawal
from other ACSI offices/agents.

High level of illiteracy and lacking mobile phones contributed to low level of tech-friendliness which
challenges scalability of digital financial services.

11
The Cash Learning Partnership (CaLP) glossary defines financial inclusion as “that a full suite of financial services is
provided, with quality, to all who can use them, by a range of providers, to financially capable clients.”
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5. CONCLUSION

The 2018 e-transfer was effectively conducted in terms of the amount of cash transferred and clients reached.
The achievement shows mobile transfer piloting can be a modality of cash transfer to be pursued in the rest
of the project locations. However, full benefits of mobile cash transfer were not realized since all clients used
ACSI cashiers’ mobiles and PIN codes were open for ACSI cashiers. The procedure of signing on payroll
upon receiving cash nullifies the option for cash withdrawal from other ACSI offices/agents. The fact that
cash was not transferred timely as per the PIM is attributable to all implementing partners. A number of
reasons exist for delayed cash transfer which should be addressed in the coming year. A number of clients
didn’t collect their January and February entitlements for valid reasons but others were not accounted for
some reason which calls for further study. The e-payment steering committee has contributed a lot for
success of this year e-transfer. Regional e-payment steering committee has played pivotal role for the success.
The study shows there are some key elements to consider gender wise to implement the project in a better
way. Overall, clients have been satisfied with the e-payment pilot despite the challenges they have faced during
implementation.

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6. RECOMMENDATIONS

1. Obvious justifications were obtained why many of the clients didn’t collect their entitlements.
However, there are a number of clients whose absence couldn’t be explained. Government has to
investigate the underlying real causes to ensure such instances are avoided in future transfers.
2. ACSI must pay clients at their Kebele centers if possible at sub-Kebele level. ACSI must engage agents
to ensure continuous presence of payers at the clients’ vicinity. ACSI should also consider adding
more branch offices and satellite offices.
3. To realize full benefit of mobile cash transfer, ACSI shall start paying with client’s mobile. The system
should allow secured PIN codes for illiterate community. The practice of signing on payroll should
be avoided; instead, clients shall sign on cash withdrawal request form at any of the M-birr agent.
4. Objective performance indicators should be set and appraisal of each stakeholder should be regularly
conducted and accountability scheme established. E-payment steering committee meeting should
practice use of a checklist of activities with agreed due dates to effectively monitor progress. Woreda
e-payment steering committee should conduct regular meetings and field observation of the transfer.
5. Targeting should be given proper emphasis to provide service to the poor as intended by the project.
Government should ensure the complaint redress mechanism is established and is made functional.
Full family targeting should be practiced. Physical ability of clients should be well observed before
assigning as PW participants.
6. More effort required to provide option for physically impaired clients. Kebele administrators should
consider such groups of clients be delegated at home or the nearest possible location.
7. Further support and encouragement required to help clients to save as much as possible and
assessments should be made on how saving helped clients to improve food security.
8. To improve feasibility of mobile cash transfer, Regional Government determination required to
improve numeracy and literacy level of clients through adult education, mobile apparatus should be
availed to the community with low price and mobile network quality improved.
9. ACSI should provide system generated anonymous cash transfer data to FH signed and sealed as per
the agreement.
10. ACSI should avail means of transport for its staff to travel to rural Kebeles. FH must provide
motorbikes to ACSI as agreed in the contract.

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7. APPENDICES

7.1. INTERVIEW QUESTIONS

7.2. FGD PARTICIPANTS

Kebele Administration FGD participants

S.N Name of participant Woreda Kebele
1 Asefa Boge Lay Gayint 22
2 Rev. Kinde Geremew Lay Gayint 22
3 Kinde Belay Lay Gayint 22
4 REv. Girma Asefa Lay Gayint 22
5 Engidaw Demisse Lay Gayint 22
6 Marelign Getu Lay Gayint 22
7 Tiruneh Alebe Lay Gayint 22
8 Getasew Welde Lay Gayint 23
9 Desyilal Zeleke Lay Gayint 23
10 Misganaw Zinabu Lay Gayint 23
11 Habteweld Asnake Lay Gayint 23
12 Asres Temesgen Lay Gayint 23
13 Rev. Abraraw Chane Lay Gayint 23
14 Mariye Angash Lay Gayint 23
15 Mekuannent Adugna Lay Gayint 23
16 Ebabu Eshete Lay Gayint 25
17 Fentaye Demewez Lay Gayint 25
18 Banti Dese Lay Gayint 25
19 Endalamaw Dese Lay Gayint 25
20 Yemataw Demise Lay Gayint 14
21 Misge Ayalew Lay Gayint 14
22 Tsegaye Arage Lay Gayint 14
23 Tesfa Fiqire Lay Gayint 14
24 Mengiste Adege Lay Gayint 19
25 Kindu Qagne Lay Gayint 19
26 Tesfaye Gedefaw Lay Gayint 19
27 Dejen Zeleke Lay Gayint 19
28 Ayichew Rede Lay Gayint 19
29 Tesfa Aschalew Lay Gayint 19
30 Semagn Ashagre Lay Gayint 19
31 Abiyot Tizazu Tach Gayint 4
32 Birku Gule Tach Gayint 4
33 Liyew Ejigu Tach Gayint 4

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 Kebele Administration FGD participants
S.N Name of participant Woreda Kebele
34 Destanew Mekuannet Tach Gayint 2
35 Eskedar Ebabu Tach Gayint 2
36 Amare Asfaw Tach Gayint 2
37 Tade Yihune Tach Gayint 13
38 Adis Dagnaw Tach Gayint 13
39 Belaynew Melak Tach Gayint 13

E-payment steering Committee FGD participants

S.N Name of Participant Woreda Position
1 Temesgen Birhan Lay Gayint WAO Head
2 Aderajew Hailu Lay Gayint ACSI Branch Manager
3 Sisay Mihiretu Lay Gayint WFSP Head
4 Anteneh Adamu Lay Gayint FH Project Manager
5 Yismaw Leake Lay Gayint WFSP PSNP Officer
6 Kokeb Birhan Lay Gayint WFSP NRM Officer
7 Mekuannent Asfaw Tach Gayint WAO Head
8 Aschalew Mathewos Tach Gayint FH Project Manager
9 Lule Mekuannent Tach Gayint WFSP Head
10 Yilak Adugna Tach Gayint WFSP PSNP Officer
11 Sisay Eniyew Tach Gayint WFSP NRM Officer
12 Balemual Gedlu Tach Gayint ACSI Branch Manager

37