Vodafone India is pioneering a mobile money scheme allowing the state to pay social security pensions directly to an M-Pesa account across remote villages in the north of the country.

Under the scheme, Vodafone India gives every pensioner a mobile contract and an M-Pesa account in remote rural villages across the Haryana state.

The department of social justice and empowerment can then directly transfer their pensions.

Traditionally, pensions would be distributed locally through the elected head of each village’s government, who would share a list of all pensioners in their village with the department. A total payment would then be transferred and subsequently distributed to pensioners.

“The introduction of M-Pesa has helped bridge the gap, creating a more convenient and secure way for the state to pay pensions directly to recipients and, in the process, reduce the number of overall discrepencies in the payment process. The right pensioners get paid, on time,” read a Vodafone India business services blog.

The project started as a pilot in five villages, and has now been deployed successfully across 67 villages within the state. In total, it distributes INR165 million (£165,000) to more than 11,500 pensioners each month.

Vodafone India’s M-Pesa business had a total 1.3 million active customers at the end of March and about 120,000 agents.