Displaced Populations, Humanitarian Cash Transfers and Mobile Money

February 27, 2017 | Mobile for Humanitarian Innovation | Mobile Money | Global | Jenny Casswell

At the World Humanitarian Summit last year, the GSMA committed to broaden the remit of Humanitarian Connectivity Charter to offer expertise in mobile-enabled fund disbursement and disaster preparedness. As the number of displaced people worldwide continues to rise, more humanitarian aid is urgently needed. Efficient delivery of such aid is crucial, and humanitarian agencies are increasingly adopting digital or mobile solutions to achieve this.

The Disaster Response and Mobile Money programmes are undertaking research – consulting with mobile network operators, mobile money providers and the humanitarian sector – in order to uncover and start addressing the opportunities and challenges of mobile cash disbursements in disaster-prone countries.

The topic was high on the agenda at the World Economic Forum last month, where GSMA played a significant role in the launch of new “Principles on Public-Private Cooperation in Humanitarian Payments.”
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The transition to cash-for-aid programming and digitising the delivery of aid

Humanitarian actors are increasingly moving away from in-kind transfers, such as food or blankets, choosing instead to provide cash assistance, which is widely perceived as a faster, more effective and beneficiary-centric way of delivering assistance. Harnessing technology to digitise these fund transfers can lead to more efficient and effective cash delivery. Furthermore, mobile money presents the opportunity to enhance financial inclusion and resilience amongst humanitarian beneficiaries, by providing access to a broad suite of financial services, including savings, credit and remittances.

Displaced populations are predominantly located in developing countries, and an increasing proportion of them now reside in urban areas, where mobile money services may be more widespread than banks or other formal financial institutions. GSMA data show that at least 19 markets have more mobile money accounts than bank accounts and 37 have ten times as many registered agents as they have bank branches. At the same time, displaced people are increasingly connected, living in places covered by mobile networks and with mobile phone ownership rates that rival those of the world’s overall population. This represents a significant opportunity for partnerships between mobile money providers and humanitarian actors.

In humanitarian contexts, mobile money-based interventions can take different forms

There are three forms in which mobile money can be leveraged to deliver cash-for-aid in humanitarian settings. These are;

  • fund transfer directly into a beneficiary’s mobile money account;
  • fund transfer via a mobile voucher for cash-out; and
  • fund transfer via mobile voucher for a pre-determined purpose, such as buying food from a specific merchant.

Depending on the nature of the displacement, beneficiaries require different types of support and services. For example, in the immediate aftermath of a crisis, beneficiaries’ short-term needs may be met via in-kind aid and voucher-based programmes, thus benefiting populations who may not have official identification documentation or access to functioning markets locally. On the other hand, cash payments via transfers of funds into a beneficiaries’ mobile money account may be more appropriate for stable or protracted displacement contexts because it facilitates access to a suite of digital financial services (savings, lending, bill payment, remittances). Access to these services can accelerate self-sufficiency, resilience, community integration and financial inclusion.

Mobile money will not always be a relevant mechanism for the disbursement of aid

Although there is a clear opportunity, mobile money will not always be the best way to disburse cash aid, and even in markets with more mature mobile money ecosystems, the full potential of delivering cash aid via digital means is no easy task.

There is a need to establish a common understanding of service delivery parameters between the humanitarian sector and mobile money providers. This includes an understanding of network and agent coverage, agent liquidity, device ownership, gender gaps and sufficient lead times. All of these factors can determine whether or not mobile money will be a feasible or appropriate modality for aid delivery in any given humanitarian context.

Procedural reforms to ensure an enabling environment are key

Forthcoming research focusing on three markets (Haiti, Rwanda and Pakistan) that have leveraged existing mobile money services as a means to deliver cash assistance, demonstrates the importance of procedural reforms from various stakeholders to ensure an enabling environment. Reforms can include:

  • the extension of SIM dormancy periods by MNOs to facilitate the receipt of infrequent cash disbursements;
  • the deployment of fixed or roving agents to perform cash-out services for beneficiaries;
  • implementation of strategies to ensure sufficient agent liquidity, including the staggering of beneficiary payments by humanitarian organisations to relieve pressure on mobile money agent networks; and
  • implementation of special KYC rules by the regulator to ensure persons without formal identification are able to benefit from financial services, including mobile money.

All stakeholders, from beneficiaries to humanitarian organisations to mobile money providers, have a lot to gain from the proper deployment of mobile money for aid payments. The true potential of cash disbursement via mobile money is reached when the ecosystem exists to support other services such as remittances, airtime top-ups, savings and lending, and bill payments.

We look forward to presenting our research findings at a roundtable session at Mobile World Congress 2017 and hearing from stakeholders about their unique experiences in deploying mobile money to deliver aid assistance.

< The forthcoming report will be available on our resources page in the coming months, and a blog series outlining the key findings of the report will also follow >

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