©UNCDF
Digital payment ensures continuity of electricity supply and delivery of health service in Zambia
Luwi Mission Hospital in Ntambu sits on a sprawling campus in the heart of Zambia’s remote North-Western Province. Run by the Catholic diocese, it provides quality healthcare services to more than 23,000 rural people and is a nursing school for 200 students. The hospital’s healthcare services include laboratory diagnostics, maintaining the vaccine cold chain, and a small theatre for simple procedures. Given the critical services offered by the Hospital, reliable electricity is essential.
Because of its remote location, however, the hospital and the immediate surrounding area are not connected to the national electricity grid. Rather, they are served by the Rural Electrification Authority (REA) mini-hydroelectric power station, a new power station that was commissioned in 2019 and provides 0.6mW of power to area with a radius of about 50km, sufficient to serve the community. Similar grids dot the country to ensure even the remotest areas have access to electricity.
The challenge, however, is the mini grid stations need to be financially self-sustaining which requires customers – the hospital, local businesses, and consumers – are able to pay their bills in a timely fashion. But with the nearest bank 120 km away (roughly two hours of travel) and no other payments options available, the system was under stress and continuous service could not be assured.
To meet the challenge, the Ministry of Finance, in partnership with UNCDF and the India-UN Development Partnership Fund, supported REA with both a grant and technical assistance to implement a digital payment ecosystem for electricity-use at the hospital and the wider community. The partnership aims to increase access to electricity and the use of digital payments for power and other essential services and will ensure that the mini grid has a reliable and efficient channel of payment. This project supports the Luwi Mission Hospital and surrounding areas with REA and UNCDF targeting 2,000 household and commercial electricity connections by the end of 2022. And while an initial 180 connections had been targeted for completion by June 2022, the actual completion rate was 500, a testament to the effectiveness of the project’s implementation and the community’s interest.
By creating this digital payment ecosystem, REA and UNCDF is increasing the use of digital financial services for people of the region, particularly women, which will enable the community to gain better control of their utility payments and household expenses. It also cuts down on the risk of theft that can accompany withdrawing the kinds of cash needed to meet monthly expenses and improves the ability for community members to meet unanticipated needs. The new digital payment system will enable the communities to buy electricity as needed and improve their funds’ management. It also allows greater efficiency in how community-members travel to resupply goods and seek financial services, thus saving on fuel and other travel-related expenses.
“Using a digital payment method will make a big difference for us here at the Mission. This way, we can focus on the important tasks and not worry that our power be cut off. We can also plan and manage this better.” – Sr Chrispine, Sister-in-Charge of Luwi Nursing College.
Members of the community added that for their household use, a digital payment method would also make a big difference and thus, digital payments have a far-reaching effect. Access to reliable digital payments will enable these far-flung communities to remotely utilise e-commerce and other platforms for goods and services, thus expanding and strengthening the digital ecosystem in the province. This enables users to continue adding value to their lives.
The project’s training component is designed to ensure community members understand how to use the system for both consumers and businesses. To this end, UNCDF is collaborating with Viamo, its customer education partner, who is providing training on how to make safe digital payments as well as booster teams which are continuously working to build community members’ financial literacy and confidence in these services. Bringing digital payments for electricity to the area will contribute to the growth of a larger digital ecosystem for the people in the region. This includes mobile money agents and merchants, thus offering additional employment opportunities. Most importantly, people in this area will be able to pay for the services they critically need. The use of digital payments will open up access to other services and products, thus enable end-users to actively participate in the digital economy and the country’s broader digital transformation.
Produced and edited by UNOSSC, UNDP and UNCDF Zambia.
