Seeing the Benefits of Electronic Aid Delivery Up Close in Rwanda

Last month, Tidhar Wald, the Better Than Cash Alliance’s government and corporate relations specialist, had the opportunity to witness how the program was working while conducting an outreach tour across Africa.

“I wanted to see what it would look like,” said Wald. “As a government relations person, who is out there advocating for this shift to electronic payments, I was interested to see once again with my own eyes how the provision of e-payments can make actual people’s lives better on the ground.”

Wald was invited by WFP to join a site visit of the Gihembe refugee camp after attending an international conference on financial inclusion in Kigali, Rwanda in July.

Since 1997, the WFP has relied on in-kind food distributions to feed the 14,500 refugees in this camp, most of whom are from the Kivu province, across the border in the Democratic Republic of the Congo. Beginning in January 2014, WFP provided nearly 3,500 mobile phones to the heads of households in the camp. Each beneficiary within the household receives RWF 6,300 close to (US $10) per month to buy food from local merchants identified by WFP as able to continuously supply safe and nutritious food items.

A “Win-Win-Win” System

“It’s been incredibly successful,” said Wald. “When I talked to WFP colleagues and aid recipients, they all said the electronic distribution program was useful, efficient and provides better service to recipients.

It’s win-win-win solution – for WFP, for the host community and for refugees. For WFP, it is cheaper and more cost-efficient. For the local merchants, the program provides new market opportunities. And for the refugees, it is faster and more convenient, plus more households now have mobile phones.

At the center of the camp, Wald toured the building that used to be the food distribution center. Now, the camp is surrounded by licensed food merchants. “Queuing was a major issue for the refugee families,” said Wald. “It wasn’t just a few hours; the people I talked to said sometimes they even stood in line for several days, in the hot sun or the rain. Now, they receive a text message that their entitlement has been credited to their phone, and they can go straight to any of the merchants, buy food, and pay with their mobile phone.” Those who choose to withdraw cash have the added advantage of doing so at any of the bank agents.

Several recipients, including Jamma, a pregnant mother of two, told Wald they also appreciated being able to choose the food they feed their families. As we noted in covering the electronic aid distribution program in Merti, Kenya, having the autonomy and dignity to choose one’s own diet is a powerful break from the stigma of poverty.

“Many people said the local merchants were offering better produce as they compete for customers,” reported Wald. “It’s exciting to see a marketplace growing up around the camp, with examples of competition and innovation. I saw some young men bring in a car battery to set up a mobile phone charging station, given that more households now have phones and have a need for this service.”

While the local merchants were glad to have new customers, the WFP administrators reported the electronic aid system was substantially cheaper to run than in-kind food distribution. The WFP no longer has to coordinate truck deliveries or sort portions.

Plans to Expand The Program

“As advocates, we talk about the benefits of electronic payments: they can be more efficient, cheaper to administer, more secure, and potentially more empowering to women and children,” said Wald. “In this case, it was inspiring to see all those benefits in action at the same time.”

With the pilot at the Gihembe refugee camp already proving successful, the WFP is looking to expand electronic cash distributions to other camps where they operate in Rwanda. The mobile-based solution is based on mVisa, provided by Visa Inc. and operated by financial institutions in partnership with World Vision, which is implementing the project in the camp, UNHCR and the government department responsible for refugee affairs, MIDIMAR.

As the partners have learned, such programs are ideally suited to areas that are food secure. To be successful, switching to a cash transfer program from in-kind food distribution depends on having enough merchants to source enough food from farmers in the marketplace. Wireless, paperless solutions are also more secure and efficient than handing out cash.

“At no point in the chain does anyone take out paper money; it’s all done on mobile,” said Wald. “It’s brilliant how simple it is.”