Over the past several years the humanitarian agencies like UNHCR and WFP have been changing the way they deliver aid. In the past, support for forcibly displaced people (FDP) was generally provided in-kind, but now there is a large shift towards providing cash aid. This is because it allows beneficiaries to decide what they need most, while also supporting the economy of the host communities where they live.
This makes sense, and humanitarian cash transfers are gaining momentum fast. In 2016, CaLP published The State of the World’s Cash Report, which noted that US$2.8 billion was distributed in cash in 2016. While it was still only 10% of the overall humanitarian aid distributed that year, it was a 40% increase from 2015.
As the humanitarian sector scales the distribution of cash aid, they increasingly need smart digital solutions to help them do it effectively. Together with the GSMA Mobile for Humanitarian Innovation (M4H) team we investigated the business case for using mobile money to facilitate these cash transfers, the challenges first movers were experiencing, and the competitive edge mobile money holds with other available digital solutions.
Overall, mobile money is a competitive solution, but much work still needs to be done so it is easy to implement for humanitarian organisations and provides meaningful revenues for providers. The path to success will involve closer coordination between the sectors, including a partnership model which treats many of the investment costs as public goods, to be funded by public sector entities.