Mobile Money Delivers Critical Aid

An issue that humanitarian organizations abroad have always faced is distributing aid to people that live in areas where bringing supplies in is difficult. Sometimes, once the aid is there, it may not entirely meet the needs of the people living there. Especially in the case of dealing with the aftermath of natural disasters, sometimes the roads are blocked or large shipments of food and supplies cannot safely travel within the country.

In the aftermath of the 7.4 magnitude earthquake in Guatemala in 2012, international aid organization Oxfam decided to try out a new idea for distributing aid. They teamed up with Tigo, a mobile service provider, to deliver financial aid through text messages to get to people who were physically out of reach. This money gives the recipient the freedom to allocate the money within their family in the way they best see fit.

The concept, known as mobile money, is a form of electronic currency. This electronic currency is sent to the mobile phones of people in need and can be distributed quickly in the wake of a natural disaster. It is stored on the mobile phone and is accessed using a personal identification number similar to a debit card, but can be used by people who don’t have a bank account. Mobile money can then be converted to cash at designated points or can be transferred to another person or used to buy supplies.

Miguel Angel Avendano, the head of financial services for Tigo Guatemala, says money aid is better than something like food aid because money aid can be used to fit individual needs and help restore the local economy. He adds, “The problem with food bags is that in most of the cases its contents are already sold within the local market at lower prices. Sometimes the type of rice, corn and beans from the food bags are not the ones the families use–or they already have grains in their homes but need meat instead. Additionally, food bags are expensive to make, transport, store and distribute.”

So far, Oxfam has distributed over 282,000 dollars in mobile money to 1,700 families.

Colleen Eckvahl

Sources: Christian Science Monitor, Latinalista
Photo: Oxfam