Three case studies on electronic cash transfers were conducted in Ethiopia, Zimbabwe and Bangladesh and their findings point toward several key areas where humanitarian assistance organizations could focus their efforts to provide the most effective financial services in crisis situations.
Cash transfers, in this case administered via mobile money applications, are often an excellent way to provide humanitarian assistance when disaster or crises strike. Programs’ potential benefits from electronic funds transfers include increased security, lower cost, and improved ability to monitor transactions to support transparency of disbursements. However, challenges to administering cash effectively through mobile money programs often arise in the humanitarian setting where services must be delivered as soon as possible, and there is little time for planning and preparation.
These case studies concluded that this approach to electronically putting money into the hands of those served by humanitarian programs should focus on the following in order to combat common challenges and increase administrative effectiveness;
- Digital literacy is necessary for effective use of mobile money, and requires ongoing training and practice, which is often not feasible for humanitarian programs. In Zimbabwe, where people were more familiar with mobile money, person-to-person e-transfers increased most significantly, from 20% to 76%.
- Prior to investing in activities, participant demand for those services must be determined so there may be better uptake. Understanding the needs of participants is critical.
- The liquidity of mobile money agents must be monitored to avoid any cash flow problems which would impact the quality of and trust in the program.
- Sufficient support for recipients of mobile technologies must be provided in order to reduce barriers to cashing out. In Ethiopia, those who had issues with their PIN numbers, and then had to make trips to the mobile money agents to resolve them with varied levels of success, were 87% less likely to prefer mobile transfers over physical cash and 57% less likely to consider using their accounts in the future.
- Creative financing options for the purchase of phones should be considered Such as subsidies and loans when ownership rates are low.
- Constraints associated to gender may impede women’s access.
The original case studies can be found here, in addition to a synthesis by the Humanitarian Policy Group;