Aid agencies turn to cash payments to refugees

Kampala: Aid agencies have resorted to sending aid money directly to the recipient refugees.

While releasing the findings from its pilot testing of digital payments to refugees in Bidi Bidi, the UN Capital Development Fund (UNCDF) Knowledge Management Consultant, Naomi de Groot pointed out that the system had proved to be both secure and cost effective.

Out of the 20,000, DanChurchAid successfully made payment to 15,000 refugees. Beneficiaries received eight installments of $38 per month.

“These transfers are provided to people with special needs, such as pregnant women and the elderly, or refugees taking part in ‘cash for work’ programs,” Naomi de Groot said.

She further added that in order to efficiently provide adequate aid to refugees, more and more humanitarian organizations and international non-governmental organizations have decided to convert in-kind support to cash-based transfers.

She said that they have decided to phase out cash payments because of the high operational costs involved.

“With cash payments, we would have to hire a bullion van to transfer the money upcountry to these settlements. We would have to hire a patrol truck of police men to escort the van in addition to buying envelopes in which this money was to be packed

“We wanted to make the switch from cash to digital because we are convinced of the advantages for us as the distributor of cash: it is fast, transparent and reliable, as well as the benefits for the refugees. Receiving this money on their mobile phone gives refugees privacy, not everybody knows that they have been paid, which increases their safety. Having a phone also enables them to contact family members,” Delia B. Dean Adam, UNCDF’s Value chain and digital finance consultant told Eagle Online.

By the end of last year, Uganda was home to over 1.5million refugees.

Uganda’s refugee policy grants refugees’ access to healthcare, education, a right to work and freedom of movement.

Refugees are also provided with land for settlement purposes and to practice some agriculture to supplement food rations.

Meanwhile, like the rest of the world, Uganda too has started moving towards a cashless economy.

Digital financial services are on the increase in Uganda. In 2017, most active customers used digital savings or lending products.

New agency banking regulations offer a fresh opportunity for financial institutions to increase access to financial products, especially people in rural areas.