Digitizing aid in refugee settlements in Uganda; good for business, great for beneficiaries
Our role as UNCDF is often to highlight opportunities. Opportunities for both the private sector and NGOs. That is also what UNCDF is doing this time in refugee settlements in Northern Uganda; showcasing that it is in the best interest of all parties involved to consider digitizing cash based interventions.
In refugee settlements, such as Bidibidi, one of the largest in the world, people need all kind of things: food, materials for shelter, household tools, etc. Humanitarian aid agencies assist in different ways; In-kind, by distributing food, or by distributing vouchers, which people can use to purchase items on a conditional basis, such as input supplies for farming. However, increasingly refugees and their host communities receive support in cash, which they can use at the local market to buy their own food, household items and other needs. This is what they call ‘cash based interventions’.
In Northern Uganda, several humanitarian organisations are currently supporting refugees with cash based interventions, especially those considered more vulnerable, such as child-headed households, widows or disabled. Around 13,000 people now receive three installments of about USD 50 over certain months, through NGOs that UNCDF has partnered with - Mercy Corps and DanChurchAid. This money is intended for so called income generating activities such as opening a small barber shop, a tiny restaurant, a little shop selling soap and other house-hold items.
UNCDF Uganda facilitates digitizing these payments. Instead of cash literally being driven into a settlement, recipients can receive their payment in their mobile phones through mobile money. A change that highly increases the NGOs efficiency, as less people are needed to distribute the cash.
Receiving cash based interventions on their phone rather than in cash provides refugees safety, saves them time of having to go to the nearest market to collect the money and allows them to store their money easily. Beyond these advantages, the mobile phone also gives them a tool to communicate with their family and relatives. For that reason, making the switch from cash to digital is a great solution to NGOs providing the assistance, as well as the recipients themselves.
However, much of the needed infrastructure to make this happen simply isn’t there. There is limited network in these remote areas, especially in the newer settlements, and refugees in Uganda very often don’t have a phone.
In order to overcome these challenges, UNCDF:
- Facilitates for one of the major mobile network operators in Uganda to expand their business in these remote areas
- Supports mobile money agents in the areas and ensures that they have enough mobile money float and cash and
- Trains refugees on how to use these mobile wallets.
So, with this pilot we are also showcasing the business opportunity for the mobile network operator.
Indeed, interesting business opportunity, as refugees spend an average of 12 to 15 years in these settlements. Uganda has very progressive refugee laws. People are entitled to work; have freedom of movement and are even entitled to own a piece of land. Receiving cash based interventions on their phone, enables people to slowly but surely rebuild their lives.