Cost-efficiency of Electronic Transfers

When addressing issues related to post disaster assistance, human dignity and freedom of choice, attempts at applying the cost-efficiency paradigm is a delicate task. The research “Factors affecting the cost-efficiency of electronic transfers in humanitarian programmes”, carried out by Oxford Policy Management on behalf of the Cash Learning Partnership (CaLP), does it with a view to identifying the conditions under which a dollar delivered through electronic transfer mechanisms is better spent than a dollar delivered in cash. Interestingly enough, the research topic itself illustrates the shift away from a debate around the appropriateness of cash-based interventions to issues related to programme implementation.

The research compared seven case studies representing a diverse range of settings. For each, a summary of expenditure was broken down by the type of activity (Programme design / Institutional arrangements / Communication and advocacy / Training / Targeting and registration of beneficiaries / Disbursement of the transfer / M&E).

The analysis highlights that large parts of the costs of implementing an emergency cash programme are not related to the disbursement of the transfer. However, when specifically comparing modality-related expenditures, e-transfers were found to have high initial costs and lower disbursement costs in the long run. When focusing on the cost-efficiency within the timeframe of an emergency, e-transfers may therefore rarely be financially advantageous. For programmes implemented beyond the immediate aftermath of an emergency, however, the situation is different.

The study also points out that prices are the result of negotiations and may therefore vary widely depending on the location and even for different agencies operating within the same location. The capacity to present a programme to financial service providers as a profitable business opportunity may reduce the cost charged by the latter.

The state and level of development of the infrastructures involved plays a major role in the cost of e-transfers. Using an existing and fully functional system drives down the costs, and so does building on past programmes. Although innovations must necessarily be pioneered at some point, such attempts carry higher risks and often result in extra costs.

Finally, although cost-efficiency matters, other factors such as the impact on beneficiaries‘ dignity, financial inclusion, security and secondary benefits to the market should play a major role in guiding the selection of the most appropriate delivery mechanism.


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