The World Food Programme (WFP) Philippines, in partnership with Globe G-Cash, piloted a [1] disbursement for typhoon victims last year, ending December 2010. We’ve asked previously whether the mobile money platform is an efficient mechanism of distributing aid. A visit to the Philippines in November 2010 coupled with WFP evaluating findings of this pilot suggest that disbursing aid on the mobile platform increases speed, security, financial transparency, and cost-effectiveness versus typical cash and food distribution[2]. A significant amount of beneficiaries interviewed (20%) appreciated mobile transfers noting it to be an ‘innovative, ‘empowering’ and ‘less risky’ tool for transfers and potential savings. More research is required to answer the following two questions: what are the incentives for mobile operators to participate in cash for work programmes, particularly in rural areas; and do mobile cash transfers allow recipients to better manage cash during food crises and change their consumption and expenditure behaviours?
Development Perspective – View from WFP
The WFP pilot was intended to improve the overall food security of typhoon affected families’, build WFP’s knowledge of mobile based cash assistance and to provide support to the Department of Social Welfare and Development’s design and/or implementation of national pro-poor programmes. The three main systems of distribution that were tested for efficiency and preference were direct cash hand-outs, mobile cash transfers and cheques. 35,000 households were targeted in total, with 2,000 using the mobile platform (in peri-urban centres). Women were the recipients of the mobile money even if the male household member is the worker—to ensure that the cash distributed is used to meet household food needs. Women are notified of their payment via SMS and can cash out at any of the 18,000 G-Cash outlets or directly at accredited GCASH establishments.
MNO Perspective – View from Globe
Globe distributed free SIM cards, prepaid credit (airtime load) to be consumed during beneficiaries’ SMS-based registration, and conducted community sensitization and training campaigns for the participants. This training and trust-building element was an essential component to the implementation of the mobile-based cash disbursements. In fact, the evaluation report found that it was critical to sensitize participants to this technology—even though people are aware and ‘avid users of mobile phones… they are not always aware of such services.’
It is expected that G-Cash will increase its customer base through this pilot. Future mobile cash for work programmes will need to understand whether the costs of SIM donations and training programmes is sustainable and justify the typically short length of a programme. The WFP in this pilot covered the transaction fee for the cash-outs (1% or PHP 10 whichever is higher)—essential to incentive G-Cash and mobile money agents to conduct the transaction. Again, future programmes will need to determine the number of beneficiaries or the amount of commission agents make to create a sufficient incentive for agents.
View from the Beneficiary / Aid Recipient
The amount of cash each individual received was determined on 80 percent of the minimum daily wages of the targeted region as the cash is linked to work outputs and the time taken for a project to be completed. The amount also attempted to match as closely as possible the cash equivalent of rice amounts provided through WFP’s food-for-work (10 kg) programme. In an effort to evaluate whether the cash for work programme would be cost-effective, WFP conducted a market assessment prior to the pilot to determine if the supply of food and prices in the local market were stable. This is especially important to monitor as unexpected inflation of food prices can have the effect of wearing down the purchasing power of the transfers.
According to the evaluation findings, the impact of cash for work on all beneficiaries were: (a) the opportunity to earn income for a short period of time, (b) support and complement household food/ nutrition intake, (c) choice and freedom over the type of food purchased. Based on the findings, 72% of the cash was being used on food items, followed by school fees, medical supplies as well as transport or debt payments. Even though recipients were told that the cash should be spent on food only, it is still advantageous when they use a proportion of the cash to replace non-food household essentials that may have been lost during the typhoon. WFP noted that savings was rarely observed particularly within the urban poor context.
For future programmes, WFP may want to extend mobile cash transfers to rural areas and less secure environments as these areas are typically challenging due to lack of banking facilities, infrastructure difficulties, large distances to markets and beneficiary safety.
[1] Cash-for-work is a short-term intervention used by humanitarian assistance organizations to provide temporary employment in public projects to the most vulnerable segments of a population.
[2] Provided the local food market is functioning and that the difference between wholesale and retail food prices is within a certain range.