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Factors Affecting the Cost-efficiency of Electronic Transfers in Humanitarian Programmes

2014 — By Clare O’Brien, Fidelis Hove, Gabrielle Smith

Led by Oxford Policy Management (OPM) with support from Concern Worldwide, this research aims to answer the key question: Are electronic transfers more cost-efficient than traditional manual based cash delivery methods, and under what conditions?

Cash is increasingly offered to households in humanitarian emergencies as an alternative to in-kind aid. Under certain conditions cash may have advantages over other instruments, such as greater acceptability, utility and flexibility for people affected by disasters. There is now widespread interest in the additional benefits from delivering cash using technology such as mobile phones or electronic bank cards-’e-transfers’-rather than manually. However, several barriers have impeded the take-up of the technology, of which one is their cost.

the CALP Network commissioned this research to find out more about the cost of using electronic payment mechanisms (e-payments) for emergency cash transfers. The research draws on case studies of two countries, Kenya and Somalia, analysing the cost-efficiency (and where possible information on cost-effectiveness) of seven emergency cash transfer programmes implemented between 2009 and 2013: four using mobile money, one using a smart card and two using a traditional manual distribution method. It shows the administrative cost of delivering the cash transfer, broken down by activity (designing the programme, registering beneficiaries etc.), and identifies the factors that improve or decrease overall cost-efficiency.

Following recommendations made in Cash Learning Partnership research in 2011 on e-transfers ‘New technologies in cash transfer programming and humanitarian assistance’ and demonstrated interest from the CALP Network community of practice; the CALP Network undertook an additional three pieces of work in this thematic area in 2013, of which this is one.

The other two pieces include the development of “Principles and operational standards for the secure use of personal data in cash and e-transfer programmes” and a study of e-transfer implementation support guidelines.