EFFECT OF PAYMENT MECHANISM ON CASH TRANSFER FOR ORPHANS AND VULNERABLE CHILDREN PROGRAM IN KENYA: A CASE STUDY OF BUSIA COUNTY

Abstract

Kenya government has been implementing Cash Transfer for Orphans and Vulnerable Children programme since 2004 and in the course of the implementation cycle various payment mechanisms had been adopted. The four objectives guiding the study were: to establish the effects of payment mechanism on CT-OVC; to establish the effect of cash-based transfer on CT-OVC; to establish the effect of card-based transfer on CT-OVC and to establish the effect of the account-based transfer on CT-OVC. The study is grounded on the Diffusion of Innovation theory.  The study adopted a descriptive survey design while data was collected through primary and secondary sources employing a questionnaire as the data collection instrument that was administered to 99 sample recipients of CT-OVC in the seven sub-counties of Busia County.  Stratified in addition to simple random sampling technique was employed. The study used multiple regression analysis with the aid of SPSS version 20 as a tool of analysis. Crucially, majority of the respondents preferred to be paid through a card-based transfer mechanism at 66.7%. Similarly, only 5.1 % preferred to be paid through cash-based transfer. 12.1% preferred to be paid in the account-based transfer mechanism which is currently being implemented by the government. Mobile money transfers specifically Mpesa and Airtel money were preferred as other payment mechanisms by 16.2% of the respondents. The study recommends increased awareness on the current payment mechanisms to recipients of CT-OVC programme. Issues of long distances covered by beneficiaries to pay points, poor service delivery at the pay points and timely payments need to be addressed.  Incorporate financial literacy in the programme that shall ultimately promote financial inclusion.

Key Words: Cash Transfer for Orphans and Vulnerable Children, Diffusion of Innovation theory, Cash-Based Transfer, Card-Based Transfer, Account-Based Transfer, Payment mechanism, Mobile money Transfer