Mobile Money for the Poor: building a bridge between relief and development

Today refugees and migrants are a main concern for many countries in the world as millions of them cross borders in order to find a safe place to live. Primarily people leave their homeland to neighboring countries, or beyond, for economic and safety reasons. Before reaching Europe thousands of refugees from East Africa seek refuge in safer neighboring countries such as Zambia and Uganda. Uganda currently welcomes over 1.3 million refugees from South Soudan, DR Congo, Burundi and hosts the biggest refugee camp in the world. Zambia currently welcomes 30,000 refugees from the Democratic Republic of Congo, Somalia, Rwanda, Burundi and Angola.

Because many refugees often remain in the country where they are welcomed, the UN is increasingly collaborating with local governments and private partners to seek local solutions for refugees and encourages and assists them to establish sustainable livelihoods. Both Zambia and Uganda are faced with the challenge of migrant’s integration as they are bound to stay between 12 to 15 years in the UNHCR camps. To best support and attend to the needs of refugees, UNHCR is turning to the distribution of cash based aid.

However, distributing cash in remote rural areas does not come without challenges. How do you get the cash safely delivered to a camp? How do you ensure a flawless distribution to individuals? With the emergence of digital financial services and the penetration of mobile phones in refugee camps, digital transfers appears to offer a suitable solution. In Zambia and Uganda, the UN Capital Development Fund (UNCDF) works hand in hand with UNHCR to explore the digitisation of cash based aid. Mobile Money for the Poor (MM4P) is a global program funded by UNCDF with the aim to demonstrate how the correct mix of technical, financial, and policy support can assist in scaling up sustainable branchless and mobile financial services that reach the poor in very low-income countries.

Once the cash is transferred to the mobile phones of refugees, they can choose to save it or cash it out and spend it. Accessing financial services via accessible and affordable digital means can contribute to better the economic situation of poor people. Benefits include access to a wide variety of services such as insurance, safety net and savings for education as well as a reduction of costs related to the digitisation of money. UNCDF thus strives to bridge the distance between classical assistance, technology and development and hopes to prove that these services can be provided responsibly, at a reasonable cost, by sustainable institutions in a well-regulated environment.