As COVID-19 continues to change the global landscape fundamentally, it has the potential to trigger devastating social, economic and political crises that will leave deep scars. Cases are rising daily in Africa, the Americas, and Europe. As the coronavirus spreads, businesses and governments, struggling under the weight of the pandemic, are looking to limit cash exchanges, which the World Health Organization has warned could transmit the virus.
By Melvin B. Moore, Contributing Writer, mooremelvinb@gmail.com
The use of technology is now more beneficial than ever in the light of the need for social distancing to stem the pandemic and keep individuals healthy. In response to the Covid-19 pandemic, many countries are using cash transfers — a tool that can be fast and support local economies. The humanitarian sector has used this tactic for years to ensure that communities living through crises do not slip into deep poverty. Cash transfers are the most widely used social assistance intervention by governments, representing 65 per cent of the social assistance schemes. A total of 71 countries have cash transfer programs in place, with 54 of the new initiatives explicitly introduced as a response to COVID-19.
According to the Global Mobile Money Database (GSMA), the mobile money industry has enabled digital cash assistance to be delivered to over 2.7 million unique mobile money accounts used by people affected by the crisis. In a survey “2019 Global Adoption Survey” conducted by GSMA, 60 per cent of mobile money providers reported partnering with a humanitarian organization to deliver mobile money. The success of the money transfer and mobile payment makes it possible for millions of people to perform instant, secure and reliable financial transactions using their mobile phone. Cash payments can be scaled up quite broadly, rapidly, and efficiently, including through digital payments. But this depends on having some underlying administrative and digital infrastructure—proper identification, clean beneficiary rolls, and efficient payments mechanisms.
Governments implementing cash transfers
On March 24, India put its population of 1.3 billion people under lockdown. On April 3, the Government launched a cash transfer program, which included putting 500 rupees, or $6.50, in the accounts of 204 million women. As part of Bangladesh’s coronavirus relief efforts, the Government is providing $30 a month to about 5 million impoverished families using one of the country’s four mobile financial services.
In Kenya, the National Treasury appropriated $100M for supporting the elderly, orphans and other vulnerable members […]