(The Humanitarian Social Network)
HT to Tom Murphy for tweeting this article from the USAID impact blog...it says we must do better than cash:
It’s actually quite sloppily written for an audience that is probably aware of what is going on with cash transfers. It is advocating for the movement of cash to be better with newer technologies. Which is a good point and we can be more cost effective about it.
I think what is shocking to me is that it almost seems like USAID has made a decision on how it will transfer cash grants but in order to justify their methods, they are using good ole shock and awe arguments against the use of cash such as:
Cash costs money
Cash is dangerous
Cash doesn’t help anti corruption efforts
Cash curbs innovation.
Instead of looking at all sides of the argument and being clear why they have chosen to do this rather than a mix of approaches (and they are well justified for wanting to support electronic/more efficient transfer mechanisms) they just steam roll everything else into a bad category. I find that to be really irresponsible. And will this have an effect on any USAID money coming in for agencies? Will you be expected to abide by these new 'rules'?
And on the note of M-PESA and all sorts of innovation in cash transfers (this has been discussed before on the CaLP list, where I got many emails OFF the list supporting my hesitation around new technologies because they are sexy rather than reaching those we want to reach)....here is a good article that we should take into consideration that we might be leaving the poorest of the poor behind...
I'm pretty annoyed at USAID right now for writing such a stupid blog post and in such a manner as well. Am I just being overly sensitive or do others feel just as annoyed?
Thanks for sharing that Zehra!
I agree that the language is very all-or-nothing and that perhaps creates false dichotomies - why is it one or the other? As you say, a mix of both is probably the best solution!
On a positive note, the examples they use and the language of the article gives me the impression that they are referring more to regular payments systems (i.e. governments or private companies paying their employees). In these cases - large numbers of recipients, frequent and repeated transfers - supporting the development of electronic payments mechanisms does actually make a lot of sense, and is probably the way to go in the long run. As you point out, we can't automatically assume that the mere existence of branchless banking or mobile money will include the poorest of the poor - although we are seeing more and more government-led social protection transfers that are bridging that gap by deliberately using e-payments technologies to transfer cash to the most vulnerable.
There have also been a few examples where a donor's explicit investment in electronic payments platforms for humanitarian purposes has yielded positive and lasting results. However, as with any type of programming, creating something new from scratch is NOT a good choice for first response where speed is of the essence, and that is where I would think humanitarian programme managers need to be cautious. At the very least, we should be prepared to use a combination, e.g. do direct cash for a few months, and switch to an e-payments platform later on. A recent example from Ivory Coast: an INGO I visited started their programme in Abidjan by distributing fortified energy biscuits for 3 months, then switched to vouchers for 4 months, then moved to mobile money.
I do however feel strongly that we need to move beyond the idea that e-payments and other new technologies in aid are merely "fashionable". These technologies are here to stay and are evolving and spreading at a rapid pace, and as humanitarians we need to add them to our toolkit and be prepared to use them if and when they are the most appropriate tools for response. For example if we are responding to an urban disaster in an Asian country with a 90% literacy rate and an existing mobile money platform that is widely used and accepted by people, we need to be just as ready to roll out an emergency mobile money transfer programme as we are to distribute food, hygiene kits or cash.
I also disagree with the stereotype that poor & vulnerable people are not able to use or benefit from technologies such as mobile phones or smart cards. I have heard this time and again (usually from that moustached guy wearing hiking boots to a meeting in Nairobi!) and it bugs me every time! That guy pontificating that "'rural' people just don't have the capacity to use mobile phones", or that "imposing technology on people is a cultural crime" makes me want to throw up. As if being poor makes you incapable of learning something new. Remember the days when scientists stood around arguing that because women were smaller, their smaller brains meant that they couldn't possibly be capable of political analysis and therefore shouldn't be allowed to vote?!
While it's true that the poorest people are often excluded by the private sector, humanitarian experiences with these technologies have thus far been pretty successful. They require a lot of investment in education and customer support - and a new set of skills and capacities from our side. But if they work, and more importantly if beneficiaries accept and are satisfied using them, then why not invest in teaching people how to use a mobile phone? Programmes in Haiti, Niger, Kenya, Zambia, Zimbabwe and a half-dozen other countries have successfully used mobile phones or smart cards to transfer cash to people in remote locations with good result. I have visited several myself and many people I spoke to also felt proud that they were using phones or smart cards.
That's not to say that the systems are perfect, and there should always be a back-up in case the technology fails. Organisations should also pay more attention to allowing people to choose whether they want to receive their cash in hand, or by mobile phone / smart card if those are an option.
Again, the key thing for me is good programming and preparedness - as humanitarians we need to be ready to embrace new technologies as well as the tried and tested ways of working. And as you point out Zehra, we need to make sure that donors are doing the same thing!
I agree that e-solutions are the way forward in many developing and emergency contexts. But what bothers me a bit (and I agree with Zhera on this) is 1) the dogmatic tone of the article and 2) the selective case studies that it is based on.
NRC was hosting regular meetings on cash transfer possibilities during the drought intervention in Kenya/Somalia (I believe they still are). There were some very interesting ideas with regard to mobile money, also for areas without coverage - including mobile transmitters and setting up intermittend money-vendor systems (I think that was Oxfam if I remember correctly). Of course, when it came to the nitty-gritty of... sorry... I have to say the word... sus... sustainability it appeared that - as so often - by solving one problem you create two new ones. However, I still I believe the idea itself sounded rather promising given the country-specific context (unfortunately I didn't stay long enough to actually see the outcome of the programme).
When I look at the situation in Darfur on the other hand, it would be simply not realistic to try and switch to a mobile-based system. Not only that the coverage of mobile phones is extremely low, the network is regularly shut down by authorities to hinder mobility and communications of AOGs. Vouchers on the other hand are not well received since WFP switched its food distribution and found that the market can not support the demand. I'm still trying to work on it and I'm sure there is a better solution somewhere, but at the moment I have not figured out an implementable alternative to cash.
So yes, it is a stupid blog and extremely patronising for people breaking their heads on finding solutions in extremely difficult environments!
I think Oxfam in Turkana is using a really interesting system, whereby they use bank accounts / mobile money to transfer cash to remote traders, and the traders disburse the cash directly to beneficiaries. They have based it on the trader's existing customer networks and cash flow, and each trader has a set list of beneficiaries who can get their cash at his/her shop. It also works for the traders because people tend to spend a bit of their cash at the shop.
I think it's a great combination approach - showing us that mobile money / e-payments and cash are not mutually exclusive! I think Safaricom has been using solar-powered mobile transmitters to get signal out there for the drought - also pretty cool.
Interestingly a recent study on m-money in Niger found that almost all of the 4000 beneficiaries who received a phone and mobile money transfers appreciated the method and said they would prefer it over cash next time. This in an extremely remote area with one of the highest rates of adult illiteracy and lowest phone penetration in the world. It raises the question for me, how much are we willing to listen to beneficiary preference in that respect? I mean, another agency might come in and say "hmmmm, remote area, illiterate people, better do direct cash" - but what if beneficiaries actually want a mobile money solution? Who decides?
So I don't buy that using a technological solution necessarily means that the "poor and vulnerable" are left out. And having a phone of course gives you access to information, not just cash. But Christopher raises a key issue - what will the sustainability of those networks be after the aid is gone? If the private sector is seeking to make a profit on the network, it probably won't happen, and then what? Will they shut the transmitters down? The issue plagues all of humanitarian aid, really. No matter how we are transferring resources - cash, in-kind, electronically or directly - once the aid programmes have finished, what keeps people from slipping back into crisis?
As you point out, in so many places in the world, cash is still king, and that is not likely to change soon (although it might be sooner than we think)! However I still think it's a good thing if donors and governments are willing to work together to get better connectivity to remote communities and to connect the most vulnerable who, as Zehra points out, are otherwise excluded. (And as for the dogmatic tone of the article - do we really expect anything else from USAID?! Sorry, but just saying....)
This does unfortunately seem like precedent. I can just see my AOTR at OFDA sending an issues letter, "USAID does not recommend the use of cash transfers for delivery of .... Please justify." If you want to be dogmatic, there's research to support (almost) any type of intervention, in a particular context. The best bag of tricks, however, should be the full one.
Unfortunately, I don't think the donors are the only ones to blame. Last year I sat in the Kenya cash forum, as it broke into a CFW vs UCT debate, otherwise known as stick-in the-mud vs leftie upstart. We need to educate within before we can hope to communicate effectively with donors.