MyKasih: a welfare distribution programme with a technological difference
Multimedia Development Corporation
Malaysia

The Problem

Over the years, Malaysia has been plague by the alarming rise of urban poor. Rapid urbanization and industrialization are the main cause to rural migrants into urban centres and metropolitan cities. Today, about 4% Malaysians fall under low income group with household earnings less than *RM2,000 per month. Rising cost of living limits spending power and causes further hardship to these households. These vulnerable communities are also linked to various social problems.

To merely provide basic welfare in food, clothes and shelter to these poor families were not the ultimate solutions as these families need a more sustaining lifestyle to ensure health, nutritional needs and basic children education to pull them out from the hardship and poverty sufferings.

Even then, traditional disbursement mechanism of welfare delivery includes cash-based, coupons or vouchers, food ration-cards and physical delivery may not be the best option as they are prone to leakages, lack in transparency, impart heavy logistic costs and lack accountability.

While many organizations in Malaysia offer various type of aid, most welfare programmes are difficult to monitor as they work in territorial. Moreover, lack coordination amongst each other.

* Currency equivalents as of 30 December 2010
US Dollar 1 = Ringgit Malaysia (RM) 3.20

Solution and Key Benefits

 What is the initiative about? (the solution)
In December 2008, a welfare distribution programme called MyKasih was initiated to provide an innovative welfare delivery system encompassing an end-to-end solution from food-aid distribution to education and counseling to help adults be more financially independent and encourage and prepare youth for higher education.

MyKasih Foundation, a non-profit organization was then established. It aims to help less fortunate Malaysians regardless of race, religion and descent towards loving and caring neighborhood all over Malaysia. The foundation was tasked to oversee all expenditure and disbursement of contributions to ensure funds are used strictly for its intended purposes.

Contributions from corporate bodies to subsidize the cost of essential food items are channelled to the MyKasih Foundation. Through these contributions, MyKasih will credit RM40 into the beneficiaries’ account every fortnight to help defray the cost of essential food items. The beneficiary will then be given a list of ten essential items that can be purchased from selected retail outlets within neighbouring vicinity. The ten food essential items includes rice, cooking oil, flour, milk, bread, seasoning, biscuit, sugar, canned food and packed noodles.

A process of enrolment will then be initiated. MyKasih Foundation enlists the help of NGOs to identify the recipient families. Established qualitative and quantitative criteria are used to assess the qualification of the recipients. The criteria, among others include number of members in the family, household income, ownership of the assets, etc. A beneficiary, usually the mother, is selected in each family and an account is set up in her name.

The enrolment is a paperless process, using Malaysia’s Smart Card based Identification or MyKad where the beneficiary’s details are accessed directly from the MyKad chip. By making use of the Single Identity Number and electronic data stored in MyKad, the process is made simplified, automated, accurate and efficient. The fact that no form filling is required makes MyKasih user friendly approach more acceptable to illiterate women.

Apart from the personal data of the cardholder, the Malaysian Identity Card also contains digitized biometric in the chip. With this unique feature, the MyKasih system added a second level of personal authentication using the biometric features. The registration process requires checking of the MyKad holder’s thumbprint against the thumbprint recorded in the chip to assist in verifying the identity of the person registered.

Immediately after the enrolment session is completed, a Personal Identification Number (PIN) is assigned to the beneficiary as an additional security feature to be used during each transaction. This dual security feature is designed to ensure that the whole transaction process is secure.

At selected food distribution centres, the MyKasih beneficiary selects the items she requires. After selecting these foods, she proceeds to a dedicated MyKasih check-out lane to register the purchased. She then slots in her MyKad into the smart card acceptance device and keys in her PIN to complete the transaction. Only the selected 10 essential food items are allowed to be purchased from the bi-monthly allowance. Purchasing luxury items, cigarettes or liquor are forbidden as the bar-code scanner is programmed to only detect the essential items. The recipient will then be issued a receipt detailing of the purchase and balance of her eligible allowance.

The computerised system also enables MyKasih to provide audit trails, and analysis reports on demographics and consumption patterns, which makes it easy for corporate sponsors to monitor their donations.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
MyKasih was initiated through a joint collaboration between Multimedia Development Corporation (MDeC) of the Ministry of Science, Technology and Innovation Malaysia & ePetrol, a local technology provider. Together, the group formulated an innovative welfare delivery system to break the poverty cycle using technology and working with various partners to provide an end-to-end solution from food-aid distribution to education, counseling, financial literacy and budgeting skills.

Recognizing the contributions that private sectors and voluntary groups can provide, MyKasih Foundation assigns different functions to NGOs, private sectors and universities to optimize the capacity of local voluntary workers in areas where they have specific expertise and resources.

The list recipient households to be recruited under MyKasih programme are sourced from NGOs and through the national database for the poor and needy. In selecting the recipient, the Lions Club and Rotary Club assist in verifying the needy families.

Banking institutions such as Central Bank of Malaysia and AmBank manages a series of courses, aimed at helping adult family members to better manage their finances and boosting their budgeting skills while undergraduate volunteers from HELP University College provide after school tutoring to the families’ children. The National Population and Family Development Board Malaysia (LPPKN) and Community Rehabilitation Centres nationwide (Pusat Pemulihan Dalam Komuniti) offers health and parenting advises to recipient families.

Designated supermarkets namely Giant Hypermarket chain, OTK Supermarket, EconSave and Caltex and Petronas convenience store played the role as distribution centers for food while corporate bodies such as EON Bank, AmBank, Dialog Group Berhad, Sunrise, The Edge Malaysia and The Malaysian Gas Association have came forth as corporate sponsors.

ePetrol administers the payments and reconciliations between retailers and the MyKasih Foundation.

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The MyKasih was materialized with the main objective of improving quality of life by creating a welfare distribution programme with a technological difference. MyKasih uses innovations in ICT, overlaid with the Malaysian MyKad (National ID smart card) technology combined with the passion for humanity.

In modeling the MyKasih programme, 2 strategic strategies were devised:
1. Bringing the poor and needy out of poverty trap and provide safety net.
2. Self empower the poor and needy for an economically comfortable living.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
MyKasih started with a modest beginning through a pilot of 25 household recipients in December 2008. The programme was officially launched on 10 April 2009 by Datuk Badlisham Ghazali, Chief Executive Officer of Multimedia Development Corporation and had since then expanded nationwide to currently 2,700 poor and needy households within 21 geographical districts.

To date, a current total of RM1.3 million has been contributed by corporate donors to provide food aid to the MyKasih recipient.

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
Manual enrolling illiterate family member is challenging as it would unnecessarily create a sense of inferior and discomfiture for them to be registered as a MyKasih recipient. MyKasih adopts a truly paperless enrolment process whereby beneficiary’s personal details are accessed directly from the MyKad chip (National ID smart card). The enrolment process uses either kiosk or handheld device. The fact that no form filling is required makes MyKasih user friendly approach more acceptable even to those illiterate.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
Financial costs associated with this initiative include cost for integration and interoperability between point of sale terminal and MyKad at the selected food distribution outlets, as well as integration with the collection banks.
As human resources were from voluntary social workers,cost associated were merely for transportation and logistics.

Sustainability and Transferability

  Is the initiative sustainable and transferable?
The effectiveness and clarity of MyKasih in delivering aid has recently attracted foreign individuals from New Zealand and Singapore to be part of the cause in driving financial independence to bring the poor and needy into the economic mainstream.

Though to date there are 2,700 recipient households, the MyKasih Foundation has enough contribution to support up to 6,000 households.

Furthermore, MyKasih uses technology that subscribes to international standards and expandable to broader applications. There lies ahead a potential future and the extension of MyKasih applicability to cover purchases of other retail items used in public transportation and other subsidy programmes for the poor and needy.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
The use of the single Identification Number in MyKad provides direct citizens engagement and convenience in the delivery of benefits through ICT, regardless of race, religion and gender. In this innovative Food-Aid Distribution programme MyKasih, the MyKad is used as a medium of authentication and payment, as it accommodates a combination of personal authentication and biometric verification as a trusted source for transactions, doing away with traditional food-aid distribution methods such as cash, coupons, food, etc. that are not always effective, efficient and subject to abuse.

It also brings about a prudent spending culture amongst the needy while allowing confidence in the delivery of welfare, as the use of MyKad in MyKasih programme allows cashless purchases that will ensure aid is disbursed and utilised by the rightful. Incidentally, it also supports the government’s agenda towards a cashless society where cashless transactions provided 1% savings of the country’s GDP.

With the efficient delivery mechanism through judicious use of technology, staff and volunteers can concentrate their resources to providing emotional and moral support to the poor and needy families.

Dedicated voluntary groups provided household budgeting and financial skills counselling. Financial literacy will empower families to take control of their financial futures through proper savings and budgeting, a programme that had successfully encouraged beneficiaries and its families to spend their hard-earned salaries more wisely. It also instilled a sense of independent, pride and disciplined where recipients are now able to make their own purchasing decision of the essential items, discarding the misconception in behaviours commonly associated with cigarettes, alcohol and gambling.

In education workshops, school tutoring and life skills training were given to children from the poor and needy beneficiaries, organised at community centres. It aims at providing encouragement, opportunities and strength with the intent for them to break out of the poverty cycle.

As for benefits to the donors, MyKasih is an efficient solution where it ensures maximum value of the donations reaching the targeted group. This is optimised through the integration of MyKad and data integrity, supported with traceable audit trails and real-time records, overcoming fears of uncertainties in distribution of funds and issues in transparencies.

MyKasih has now supported 2,700 poor and vulnerable households nationwide. It paves the way for the poor and needy to break from the poverty cycle through a systematic digital inclusion programme, engaging the technology in MyKad, the innovation of ICT and the passion in humanity.

The effectiveness and clarity of the MyKasih food-subsidy programme has motivated more sponsors from the corporate world to do their part in giving back to the society. To date, 9 corporate sponsors have pledged their support and contributed to the MyKasih Foundation. Giant Hypermarkets has taken the programme one step further by providing a 10% rebate on the ten essential items to help their plight.

Through MyKasih transparent technology platform, caring partners from all sectors in Malaysia are now joining efforts to bring renewed hope to the poor and needy in Malaysia.

Contact Information

Institution Name:   Multimedia Development Corporation
Institution Type:   Government Agency  
Contact Person:   Syuibah Abirah Mohamed Tarmizi
Title:   Manager  
Telephone/ Fax:   +603 8315 3000
Institution's / Project's Website:   +603 8312 3042
E-mail:   abirah@mdec.com.my  
Address:   MSC Malaysia Headquarters, 2360 Persiaran APEC
Postal Code:   63000
City:   Cyberjaya
State/Province:   Selangor
Country:   Malaysia

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