How cost-efficient are electronic cash transfers?
Are electronic transfers more cost-efficient than traditional, manual-based cash delivery methods for providing cash payments to households in humanitarian crises, and under what conditions? New research has helped answer this question.
The research draws on case studies of two countries, Kenya and Somalia, analysing the cost-efficiency of seven emergency cash transfer programmes implemented by non-governmental organisations (NGOs) between 2009 and 2013: four using mobile money, one using a smart card and two using a traditional manual distribution method. The research breaks down the administrative cost of delivering the cash transfer by activity – such as the cost of designing the programme and registering beneficiaries – and identifies the factors that improve or decrease overall cost-efficiency.
Factors that determine cost-efficiency include:
- The state of infrastructure development in the country;
- The attractiveness of participation in the programme for private sector partners;
- The ability of NGOs to negotiate effectively, for example, by partnering with long-term social assistance programmes;
- The extent of innovation introduced by the programme
More broadly, the research provides an important evidence base to support the design and implementation of future cash transfer programmes in emergency contexts.