Saving lives with mobile money
The humanitarian sector has recently deployed mobile money remuneration in an effort to help reduce aid spending by increasing efficiency and transparency — and it seems to be working.
Imagine that a humanitarian crisis has hit your region, but front-line aid workers are on strike due to delayed remuneration. This is a reality that has often afflicted Sierra Leone where an average of 100 people would take part in each strike due to inaccurate and slow salary payments.
During the Ebola crisis in Sierra Leone last year, agencies tried a new approach: digital remuneration.
This not only saved USD10.7 million by eliminating double-payment, reducing fraud, and removing the costs of physical cash transportation and security, and cutting travel costs for response workers, but it helped to save lives, argues a newly published UN Better than Cash Alliance report. Reducing payment time from around one month to one week and delivering money straight to aid worker’s pockets, prevented strikes and avoided the loss of up to 800 working days — crucial on the front lines of a global pandemic.
Others are getting involved too.
At the opening of the World Humanitarian Summit last week, Ericsson announced the Ericsson Emergency Wallet, to support humanitarian aid in the aftermath of a disaster. The wallet will streamline donations to beneficiaries in a bid to ensure that country’s financial infrastructure does not collapse following a crisis, and that aid agencies have a system in place in case disaster strikes again.
Some statistics
All of this sounds great, yet the mobile money gap is prevalent: registered mobile money accounts stood at just under 300 million globally in December 2014.
And according to a December 2014 GSMA report, mobile money services were available in 61% of the world’s developing countries (139 markets) in December 2014, while roughly 60% of the population in less economically developed countries had a mobile subscription in 2015. ICT deployment would need to proliferate more widely to support these humanitarian disaster remunerations in the long-term.
Furthermore, only “47 out of 89 markets where mobile money is available, regulation allows both banks and non-banks to provide mobile money services in a sustainable way.” Given that 2 billion people remain unbanked globally, mobile money may not solve financing issues for everyone following a humanitarian crisis.
Moreover, during a natural disaster for instance, communications infrastructure is often destroyed or overwhelmed — would this impact the ability to maintain financial transfers via mobile money?
Though mobile money is not a ‘one-size fits all’ solution, with the greater proliferation of ICTs and the necessary infrastructure, these programmes have the potential to revolutionize aid spending in the long-term.
