E-money eases donations to the vulnerable in the pandemic

Technology is re-shaping humanitarian intervention and donors are exploring innovative options to reach the vulnerable

14 May 2020 . 5,470 Views

Mbugua Mwangi runs on hope. That’s how he decided to bring learning and life skills to children from poor families in Mutuini, an economically deprived neighbourhood that sits 18 kilometers northeast of Nairobi near Dagoretti Market.

He didn’t have much going for him. But he was confident that he would raise the funds – a little from his personal income and some more from funders – to bring his hope alive so that he could in turn light up the hopes of others and give little children a chance at life.

Five years ago, Mutuini Hope Center was born. Today, the centre hosts 145 pupils daily from the neighbourhood its named after for day schooling and at least two meals.

The center’s headline fundraiser is an annual half-marathon which has now been delayed by the coronavirus pandemic. Their whole way of life has been disrupted. The center has to deliver food packages to the pupil-families at their doorsteps, waiting for the day the crisis will clear.

Donate Bonga Points

As he sources harder-to-find funding for the center, Martin has given potential donors an additional option in lending a helping hand: they can also donate their Bonga Points.

“KES1,700 feeds a family for two weeks. We accept any amount or food rations delivered to the center. We are even collecting Bonga Points which I am hoping to redeem for shopping,” Martin says of Safaricom’s Bonga for Good initiative, which enables customers to pay for goods and services using Bonga Points or transfer them to those who need them.

Food donations ready for distribution at the Mutuini Hope Centre.

The situation at Mutuini Hope Centre is similar to that of millions across the world whose potential to earn a living has been affected negatively by the coronavirus pandemic.

The crisis has put millions out of jobs and exacerbated food insecurity around the world.

Food security

Governments, organisations and even individuals are grappling with how to enhance food security for the vulnerable to make it through the crisis without sliding into famine.

Benson Mutuku, who has 14 years’ experience working at an international humanitarian agency involved in emergency relief and development projects, says cash transfers give those who are in need of assistance more dignity and flexibility.

“Our experience from previous disasters shows that sending money directly to the affected communities is more effective, instead of spending part of the donated relief funds on overhead costs,” says Mutuku.

“Money enables beneficiaries to meet their basic needs, such as food or non-food items.”

In the past decade, many humanitarian aid organizations have increasingly adopted cash-transfer approaches, and a strong body of evidence shows that cash transfers are often more efficient and cost-effective than other forms of aid.

“Overhead costs associated with food donations including collecting, sorting, storing, transporting, and distributing fees are minimized,” says Mutuku.

Take the World Food Programme, for instance. They worked with Safaricom in Kenya to develop a tool that was named ‘Chakula Chap Chap,’ which enabled the delivery of emergency cash transfers to beneficiaries via their mobile phones within 48 hours of being registered during the 2017 drought.

Similarly, the initiative known as ‘Bamba Chakula’ has, for the last four years, enabled refugees to receive cash transfers through their mobile phones as a part replacement for their monthly food ration.

Digital interventions

“Chakula Chap Chap consists of three integrated systems that ensure the safety, traceability, and accountability of the scratch cards: the beneficiary registration tool, the voucher tracking system, and the voucher management system,” WFP said in a report.

In 2018, the World Food Programme carried out research to assess the effects of scaling up the substitution of the cereal rations with Cash-Based Transfers (CBT) amongst refugees in Dadaab and Kakuma camps. The study established that CBT is more cost-efficient than food transfers.

“In 2017, the total cost of delivering USD1 to beneficiaries was USD1.18 for the CBT compared to USD1.94 for the in-kind food transfers,” the institution stated.

In a 2016 Strategic Note, the World Bank argues that the composition of humanitarian assistance must be rebalanced to reflect the rapidly evolving context—cash can help facilitate linkages between humanitarian and development approaches.

“Cash assistance supports local markets, lays the foundations for communities’ recovery and resilience, and can complement existing social safety protection systems,” the report states.

Philip Ogola, a renowned Kenyan humanitarian, says cash transfers are more effective than taking food to the needy, especially now that the world is battling a contagion.

“Direct mobile money transfer is the best approach to send donations during this crisis. Coronavirus is highly contagious, and it is important that we adhere to the precautionary measures even as we extend our donations to minimize the risk of infection,” Ogola said.

Ogola added that technology is re-shaping humanitarian intervention, and donors should explore innovative options like M-PESA or electronic shopping vouchers like Bonga Points

“With reduced transaction costs, cash and vouchers result in more aid directly reaching beneficiaries, which ultimately ensures maximum impact for those in need and better value-for-money for donors and taxpayers,” Ogola said.

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