If technology can change things for better, this could be it, too.

The United Nations World Food Programme (WFP) is set to launch an electronic cash-delivery system that uses Smart Card technology that will benefit the people in remote rural areas of Nepal where banking is still non-existent.

The pilot project at Pagnath Village in Dailekh will see the launch of Siddhartha Bank’s “Sajilo Banking Sewa” implemented under WFP’s Food and Cash for Assets (F/CFA) program on June 15.

According to Nicole Menage, WFP Nepal Country Director, the program will provide financial access to rural people and introduce the concepts of banking and savings despite the non-existence of a physical branch of the bank.

With just one smart card, the people in rural areas will be able to withdraw and deposit cash, and in future have services, such as remittance payment, bill payments and mobile or credit recharge.

Under the F/CFA activities, WFP beneficiaries work on asset development projects which include construction and rehabilitation of canals, drinking water schemes and so on and receive approximately three months worth of food, or its cash equivalent.

Siddhartha Bank will be taking up the cash distribution aspects for WFP; and a total of 484 households of Pagnath Village have already been registered for the project.

Menage informed that each of the beneficiaries will be given a smart card issued by Siddhartha Bank which will store the identity of each recipient, including name, address, photograph, relevant savings details and fingerprints for identity and security purposes.

“As the portable battery-charged Point of Sale machine is operable in places where there is no electricity, it will work great even in our rural areas,” says Ashish Kumar Sharma, Head of Payment at Siddhartha Bank Limited. “All you need is the mobile service to work; and using the GPRS technology, the centers can be connected to our local server here, and transactions can be made easily.”

For the project in Dailekh, the smart cards will be credited with cash when the beneficiaries fulfill their work requirement for WFP. Then they can access their money by presenting their card to a local agent who will then swipe the card and verify the cardholder’s fingerprint before distributing the cash.

Sharma adds that with the biometric or fingerprint identification technology and voice guidance, it does not only provide security but also make it more feasible for the illiterate rural population.

Currently, only 20% of people in Nepal have access to financial services. With EAFS (Enhancing Access to Financial Services), the joint initiatives of Nepal Rastra Bank, UNDP Nepal & UNCDF, Siddhartha Bank’s “Sajilo Banking Sewa” targets to reach out to the rest of the 80%.

“The project depends largely on the agent whom we’ll select from the community itself,” says Sharma. “The agent should have enough education and technical skills to operate and handle the transaction and who also normally has continual cash flow in his business.”

If the project proves successful, Sharma adds that the technology could be used to provide mobile credit recharge, person-to-person fund transfers, remittance savings and more. Besides, even government fund for social benefits, such senior citizen and widow allowances can be distributed through this channel, reducing corruption and leakage.

For now, the beneficiaries of WFP’s F/CFA programs in Dailekh will see the payment for their hard work managed for them through modern banking services.

The project hopes that it will help local households there to better manage their money and help WFP achieve its objectives of strengthening local market economies and improving the food security of poor rural households.

Whether this can bring a positive change to the financial system and situation of the people in rural Nepal is yet to be known. Only a close watch on the reports and development of the project starting this June 15 will tell.