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Mercy Corps: Digital Solutions for Basic Needs

NORTHAMPTON, MA / ACCESSWIRE / November 8, 2022 / Cisco Systems Inc.

Cisco Systems Inc., Tuesday, November 8, 2022, Press release picture
Cisco Systems Inc., Tuesday, November 8, 2022, Press release picture

This piece was previously published on Mercy Corps Technology for Development blog. In 2017, Cisco launched a 5-year, $10 million partnership with Mercy Corps called Technology for Impact. Our goal was to help Mercy Corps use technology to deliver humanitarian aid faster, more efficiently, and to more people.

When crisis strikes, upending households and their sense of stability, the security in knowing that basic needs will still be met is a critical first step in resiliency. At the intersection of humanitarian assistance, innovation, and development, Mercy Corps, Mercy Corps Ventures, and Sempo co-developed a digital basic needs wallet (BNW) that allows users to redeem digital cash in exchange for basic goods such as rice, maize, flour, cooking oil, and soap at participating retailers and vendors. The BNW technology utilizes near-field communication (NFC), which is a short-range wireless connection that enables two devices to communicate, similarly to how a credit card machine can read a chip. Through NFC-enabled phones and e-voucher cards, the team was able to retain a record of the value of redeemed items as well as the purchases participants made in an online platform accessible by Mercy Corps and Sempo staff.

From February to June 2022, Mercy Corps, Mercy Corps Ventures, and Sempo piloted the tool in Kampala, Uganda as part of the Technology for Impact (T4I) partnership with Cisco. The pilot is indicative of a shared vision to advance humanitarian programming through the ethical and responsible application of frontier technologies. The design and implementation of BNW sought to address long standing barriers present within financial inclusion programming. With traditional cash assistance, approval processes and manual verification of identification can often hinder the ability to deliver aid in a timely manner. BNW is a collaborative intervention intended to increase efficiencies for cash assistance, enabling program participants to access their immediate basic needs with fewer barriers. 63.5% of the participants were refugees, underscoring the urgency of timely, effective, and transparent aid delivery in the path towards resilience. The remaining 36.4% of participants were from Ugandan host communities also impacted by economic and food insecurity. Based on insights from qualitative interviews with participants, as well as a quantitative account of how the pilot performed relative to its indicators of success, the pilot has yielded critical insights on how to optimize cash programming through digital means.

Who BNW Supported - In Numbers:

  • 250 households redeemed the equivalent of 360,000 UGX (about 97 USD) per month on basic items at participating vendors

  • The average household supported had 5 members

  • There were 1,315 program participants (722 female, 593 male)

  • 80% of participants' basic needs wallet was redeemed for food with around 20% left to redeem for mobile money to cover other expenses

Helping Households Cope

Household costs often far exceed what household members are able to earn on a monthly basis. Securing food, shelter, transportation, utilities, and other bills has only become more difficult as the price of goods, such as firewood, continue to increase. For Robert, a participant, breaking beyond poverty begins with feeling strengthened:

"Before being supported by the program, our family situation was not good. But now it is much better. We have enough food for the household, and now I have the strength to stand up and walk around because I feel much stronger."

A leg injury has kept him home, requiring his wife to do informal work with earnings of 5,000 - 10,000 UGX (1.35 - 2.70 USD) per day. With 500,000 UGX (135 USD) in expenses facing their household each month, her earnings are just a drop in the bucket. By covering the costs of food, BNW was successful in removing a key financial burden for this vulnerable household.

Establishing food security also proved to be beneficial for the matriarch of another household. She remarked to our team, "we no longer lack food, and it feels like someone still cares despite all the problems we have." Kahindo, another program participant, noted that BNW afforded an extra meal for his entire household:

"Before the program, we would have a light meal before supper (porridge), but now we can have two full meals." Despite the program's success in improving food security, participants encountered some challenges that are worth understanding in order to optimize cash assistance in aid delivery.

Lessons For the Future of BNW

For increased usability and uptake, participants need more freedom in using BNW. Some participants remarked that the location of retailers and vendors who accepted BNW were not always located near their household. In some instances, participants would travel lengthy distances to redeem their digital wallet only to find that the store was closed or the vendor was out for the day, leaving them without essential resources.

Participants also noted that the redemption windows need to be longer to ensure users have an adequate amount of time to redeem the wallet. Similarly, the option to cash out remaining balances of up to 150,000 UGX (40.50 USD) to cover other expenses such as rent, utilities, or medical bills was a benefit to households but could sometimes take longer than expected as some participants were unreachable on the phone as they had either changed their number or submitted a family member or friend's phone number to be used for mobile money transfers.

The predetermined list of basic needs did not always neatly fit the specific needs of a household. Many participants expressed the desire for more options, from culturally-relevant food items for refugee families, to water pumps for families struggling to access certain commodities at home. Also, the rising price of items made digital redemptions a less appealing option than traditional cash. One household noted that using cash allows for bargaining power. With an e-voucher, there is no opportunity to bargain the price.

These observations and insights illuminate a core theme of importance for participants: increased agency enables households to make the best decisions to urgently address their unique situations. Such improvements to flexibility should be pursued to further support households in coping with shocks to their finances and overall sense of stability.

Conclusion

Although humanitarians and development practitioners are exploring innovations in digital cash assistance, traditional cash has not lost its relevance. Just 45% of participants indicated a preference for digital cash versus traditional cash after being introduced to BNW. Mobile money (MoMo) remains a preference with just 48% of participants preferring BNW to MoMo. These performance metrics reflect the state of digital cash assistance in humanitarian response today: a promising innovation with the potential to reach vulnerable populations, yet one which requires community buy-in to be embraced fully. For participants, the predetermined list of redeemable items when using BNW or other e-vouchers can feel limiting. For humanitarians, BNW performed well in addressing a common pressing need: food security.

With the prevalence and accessibility of MoMo, it currently remains the more appealing option for participants over BNW. Likewise, traditional cash is still preferred as it grants more freedom in buying from a vendor of their choosing, increasing bargaining power in transactions, and having more agency in deciding what to spend money on as it relates to which needs are most pressing.

Overall, BNW yielded a 56% reduction in the time spent initiating and completing cash transfer to participants. This reduction in timing fulfills one of the main intended targets of the program and signals a promising future for innovating digital solutions to ensure that humanitarian and development programming can offer support to those in need with deliberate speed and efficiency.

The Technology for Development (T4D) team supported the Mercy Corps Uganda Team in the delivery of this pilot through partnership with Cisco, under a 5-year program aimed at using technology to deliver aid and development assistance faster, better, and to more people.

Learn more about Cisco's partnership with Mercy Corps

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SOURCE: Cisco Systems Inc.



View source version on accesswire.com:
https://www.accesswire.com/724537/Mercy-Corps-Digital-Solutions-for-Basic-Needs