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How can mobile money help IDPs in Nigeria?

How can mobile money help IDPs in Nigeria?
This entry is part 20 of 25 in the series Opinion

The advantages of mobile money services in businesses and personal financial transactions have been advocated by banking experts, financial institutions and the media.

However, little has been said about how this technology can be used to aid internally displaced persons (IDPs) who become victims of various crisis in part of Nigeria.

Mobile money is a convenient, secure and affordable way to send money to friends and family from your mobile phone. With mobile money, all phone users can transfer funds to any recipient in Nigeria and also pay for goods and services with their mobile phones.

According to a paper by the Bill & Melinda Gates Foundation, following the 2010 earthquake in Haiti, for example, the Mercy Corps and World Vision were among the NGOs that employed mobile money-enabled cash transfer programmes, which distributed $5.7 million to more than 24,000 beneficiaries.

President Muhammadu Buhari receives the 21 Chibok girls released President Muhammadu Buhari receives the released 21 Chibok girls.

How can mobile money help in crisis situation?

In a crisis situation, people living in the affected areas usually have an urgent need for essential provisions such as food, water, clothing and shelter.

In many cases, governments usually impose a curfew as a step towards restoring peace, especially when the crisis is intense. This means that those living in that area have a very limited amount of time to visit bank facilities for withdrawals and do their shopping.

In such cases, the banks are usually filled up during the permitted free movement period, making it difficult for many to withdraw or send money. Mobile money can help solve or reduce the intensity of hardship during this period.

In some serious crisis cases, many of the surviving victims are displaced. As a result, aid agencies and governments either distribute these provisions directly or hand out cash or vouchers that recipients can exchange for what they need.

Distribution costs take a large portion of the aid budget and some displaced people miss out because they are not in the right place at the right time.

In addition to the problem of cash distribution, stuffing notes into envelopes is time-consuming, and the money also needs to be transported securely to the recipients.

Governments and non-governmental organisations (NGOs) in Nigeria can take advantage of mobile money services, current technological development in the banking systems that enable people to send and receive value using their mobile phones, to streamline the delivery of aid to affected populations.

According to a paper by the Bill & Melinda Gates Foundation, following the 2010 earthquake in Haiti, for example, the Mercy Corps and World Vision were among the NGOs that employed mobile money-enabled cash transfer programmes, which distributed $5.7 million to more than 24,000 beneficiaries.

I believe this system will also work in rendering aid to those displaced by riot or terrorism especially in the North eastern part of the country.


Rather than having to pay people to physically transport cash or vouchers, value can be transferred electronically in a matter of minutes, reducing distribution costs and opportunities for corruption.

With mobile money, speed is not the only benefit. Mobile money transfer is traceable, this means that there is a digital audit trail that enables the donor or the aid agency to see exactly how many people received aid and how much value each recipient received.

This kind of transparency could encourage more donations and would help to allay fears that too much aid is wasted. Distributing aid electronically is also much safer for both aid workers and the recipients than handling cash.

A Mercy Corps study comparing the use of mobile money and physical cash distribution found that incidents of theft of cash transfers fell by more than 50% when mobile money transfer is used.

Furthermore, the use of the mobile channel to distribute aid could increase financial inclusion, enabling affected populations to access loans and other formal financial services, such as insurance.

The problem with the Nigerian situation

However, there are certain obstacles that could hinder the use of mobile money to aid victims of crisis in Nigeria.

One major problem we can face is that the poor and vulnerable may not own a mobile phone or have access to one. While for some, the handsets can be lost during the crisis.

Moreover, mobile money services depend on network coverage and electric power, which may be missing in the aftermath of a crisis. And in Nigeria, stable electricity supply has been a challenge government and electricity companies are battling with.

Another complication is helping displaced people who have moved across to another town as a result of the crisis. For example, can a mobile money service be used to get aid to refugees who are fleeing from a crisis? Meeting this need would require mobile money providers to establish an appropriate international remittance corridor.

There is also a risk that the problems associated with distributing cash are simply displaced, rather than eliminated. If the recipient can’t use the mobile money service to pay merchants, they will need to have access to agents who can distribute cash and it may take time to establish or rebuild an agent network in an area where there is tension as a result of the crisis.

Perhaps another challenge is the need to establish a disaster relief mobile money system quickly and at the time it is needed. Rapid deployment requires a turnkey solution that works across networks and regardless of the recipient’s handset model and software.

Seeing that mobile money services could increase the efficiency and effectiveness of bringing aid to those displaced by crisis, the mobile money industry, governments and NGOs should work together to address the challenges outlined above.

Mobile phone masts seen in the horizon

Possible Suggestions

First of all, mobile operators and their partners in the affected state or region will need to work together to enable the network service is up and running.

In this respect, financial regulations can be a critical factor. The operation of mobile money services requires compliance with relevant regulatory frameworks governing the transfer of money. Addressing this issue requires the commitment of national regulators and proactive engagement to identify a secure, yet flexible, solution.

There are other practical considerations. Although mobile money services can enable aid to be disbursed remotely, donors first need to identify and verify who needs aid.

Once the target recipients have been identified, the next step is to determine their requirements and collect relevant information, including mobile phone numbers.

To receive mobile money transfers, recipients also need a handset. In a case where the surviving victims of crisis do not have phones, some donors may be required to distribute handsets. Being connected will bring a wide range of benefits to the recipients, but distributing mobile phones will clearly add to the overall cost of the relief operation.

Mobile money services will help to restart the economy by facilitating the supply of goods and developing demand, directly benefiting the survivors.

There are also robust business reasons for mobile money providers to provide solutions: using mobile money services to distribute aid will help to highlight their value to both policymakers and citizens, leading to a broader increase in usage of these services.

With the ongoing improvements in mobile money and money transfer solutions, mobile money services could soon become an indispensable tool for NGOs, aid agencies and governments in responding to a crisis.

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Success Kafoi Journalist at Technology Times Media. Mobile: 08077671673 email: success.kafoi@technologytimes.ng

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