Our blog takes a closer look at the e-voucher implementation system to examine but a few, the different roles played by the actors in the ecosystem to ensure successful implementation, challenges of using electronic vouchers and recommendations to stakeholders on how to address the challenges faced in the implementation process.
In our previous blog, we discussed why humanitarian organizations and governments the world over use e-vouchers to distribute relief. We presented the challenges in the disbursement of cash and physical goods and outlined the benefits e-vouchers present to recipients, humanitarian organizations, governments, and the ecosystem. We highlighted examples of programs that have implemented e-vouchers successfully.
In this blog, we take a close look at the implementation of e-vouchers in Kenya. We assess the roles of key stakeholders in the ecosystem, understand the challenges they face, and reflect upon the lessons learned so far.
The implementation of an e-voucher system requires various actors within the ecosystem. It entails coordination among stakeholders comprising humanitarian organizations and governments, the platform or service provider, local vendors, external suppliers, and beneficiaries.
The various actors within the ecosystem play different roles, as follows:
Humanitarian organizations and governments
The payment service provider(s)
The beneficiaries
The local vendor
Figure 2: AN example of an electronic voucher redeemable at a specified merchant outlet in Kenya
Challenges of using electronic vouchers
Limited choice of shops to redeem vouchers
The humanitarian organizations and governments may predefine the shops where the e-vouchers can be redeemed. In some instances, remote areas may lack enough shops, which may mean that beneficiaries have to travel far to redeem the e-vouchers for predefined goods. Due to reduced competition, the shops may increase the prices of goods, sell substandard quality items, or charge beneficiaries for products they have not purchased.
Low levels of digital capability
Low levels of digital capability undermine the use of mobile services, which impedes the usage of e-vouchers.
Infrastructure challenges
Challenges related to infrastructure, such as inadequate mobile network connectivity hinder the ability of beneficiaries to use e-vouchers and also their ability to join assistance programs. Programs incur high costs when setting up the e-voucher system.
Inadequate access to technological tools, such as mobile phones
According to World Bank data, Kenya has a high mobile cellular subscription of 96.32 per 100 people compared to the average in Sub-Saharan Africa of 82. Beneficiaries of social benefit programs, and particularly women have lower mobile phone ownership, live in areas with poor connectivity, and have insufficient access to electricity.
Preference for cash by external suppliers
The residents receive the e-vouchers and exchange the value for goods or services at local stores. The vendors subsequently redeem the electronic value to replenish their stock of goods or services. The lack of a digital economy may pose a challenge in remote areas since the suppliers may not accept electronic value as they often prefer cash value.
Risk of diversion of benefits
The e-vouchers program works well if the beneficiaries’ data is accurate and reliable. The point of data collection has a vulnerability—local actors may add beneficiaries who are not whom the social assistance programs target. The risk of poor targeting methods and identification reduces the impact of the interventions.
Increased costs of maintaining beneficiary database
Maintaining beneficiary databases is always challenging. This is because of the need to clean up the data regularly to take account of movements of beneficiaries, deaths, and other circumstances that may change the beneficiary’s status.
How can stakeholders address the challenges?
As the world gears up to the second wave and different strains of COVID-19, the low- and moderate-income populations will require support from humanitarian organizations and governments. According to research conducted by MSC, innovative delivery of targeted social assistance to low- and moderate-income people is critical to ensure their survival. Adherence to the mandated social distancing and preventive guidelines will provide a further impetus for digital financial services to support targeted social assistance efforts.
E-vouchers provide an opportunity for donor organizations and government actors to support individual beneficiaries and provide much-needed community development by supporting local economies. As an immediate response mechanism, e-vouchers allow beneficiaries to address their basic needs, facilitate improved preparedness and recovery, and overcome the loss of income and livelihoods among the most vulnerable.
However, e-vouchers require governments’ support and political goodwill to succeed. As governments are the major distributors of relief to vulnerable populations, its buy-in helps encourage digital financial services and e-vouchers to distribute social assistance.
E-vouchers present several benefits, such as enhanced reach, better accountability, and robust monitoring. Humanitarian organizations, governments, and the private sector have a strong case to use e-vouchers for disbursements. The conditional use of funds allows for their traceability. Thus, governments may use e-vouchers to provide bursaries to students in public government schools and bolster women’s health programs, such as the Linda Mama program.
Capacity-building efforts by payment service providers for beneficiaries and other stakeholders, such as government employees, retail merchants, and service providers are necessary to promote stakeholder buy-in, encourage acceptance, and enhance ease of use for beneficiaries.
When done right and done well, digital voucher assistance places people at the center of any humanitarian response, ensuring that those excluded from digital and financial opportunities can effectively access, use, and make their own life-defining decisions for their families.
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