Kenya is the first country in the world to use mobile phones for cash transfers. In another first, in response to a food crisis affecting four million people in Nairobi’s slums, the Government of Kenya hasasked Concern to pilot the nation’s first-ever social welfare program—again using mobile phones to distribute emergency cash to the absolute poorest living in the slums.

Families in Nairobi’sslums have slipped from chronic poverty into a serious humanitarian crisis inthe past two years. Successive failed rains over the last two years and prolonged drought have drastically lowered the nation’s food production. The skyrocketing costs of food pushed an already desperate people into extreme poverty rendering them incapable of feeding their families or paying for basic services such as health care, rent, and school fees.

With no land or means of growing their own food, slum residents are entirely reliant on what they are able to purchase at markets. Kenya’s severe drought has crippled the nation’s food production and driven the prices of available food supplies even higher. The price of maize, a basic staple food for the poorest, has increased by 133 percent over the past year, while incomes have shrunk by 21 percent, forcing families to resort to desperate measures to survive.

Most of the poorest slum residents can now only afford one meal a day (if lucky) and paying for even this minimal amount of food requires significant sacrifice.

The Human Cost of Hunger

The rising costs of food are forcing the poorest parents to make choices no mother or father should face: they must choose between doing what it takes to put one meal a day on the table and paying fees to keep their children in school or paying for medicine and health care. For those living with chronic illness and disease such as HIV, this is literally a choice between life and death.

For single-parent families, conditions are precarious indeed. Besides rising rates of malnutrition in children under five and the long-term impact of children being pulled out of school, one of theconsequences of the urban food crisis are increasing numbers (33% increase) of women and young girls seeking an income as sex workers.

Using Mobile Phone Technology to Protect the Poorest

Social safety nets are necessary to ensure that the survival of those in greatest need is not threatened. Concern’s Country Director in Kenya,Anne O’Mahony, reports that the maize harvest in late summer was far below what was expected. She says, “This was a big blow: we were hoping that a good harvest would reduce the price of maize for the slum populations in Nairobi.”

In response to this crisis, the Government of Kenya asked Concern to pilot the nation’s first-ever urban social safety net program: with funding provided by the Government, Concern, along with the World Food Program and Oxfam GB, has begun to distribute emergency cash via mobile phone technology to some 21,000 families in four of Nairobi’s biggest slums, Kibera, Korogocho, Mathare and Mukuru. The families will receive 1,500 Kenyan shillings (the equivalent of $20) per month for the next 8 months.

Kenya is the first country in the world to use mobile phones for cash-transfers through a service called M-Pesa developed by Safaricom Limited. Concern Worldwide partnered with Safaricom to pioneer the use of M-PESA for bulk cash transfers during the post-election emergency in early 2008 in the KerioValley, one of the remotest parts of Kenya. A code sent to targeted beneficiaries via text message can be redeemed for cash at authorized M-PESA agents throughout the country. Concern’s initial response was to provide food aid, but carrying and distributing food proved inappropriate as the terrain was rough, the area insecure and food was already in the local market but people just could not afford to buy it. Cash transfers were seen as a way of overcoming the challenges posed by the terrain and the security situation. The pilot was expanded to over 6,000 families assisting them with both food and restarting their means of supporting their families with a total expenditure of over $1.5 million.

Because recipients head straight to local markets to purchase the food or other supplies they need, evaluations show that emergency cash transfer programs such as these keep the local economy moving, and the agriculture sector buoyant. Unlike food distributions, emergency cash aid empowers poor families to choose what will help their families most in a crisis and to decide whether food, school or healthcare costs are most urgent. 

Emergency cash distributions are also more cost effective than food aid. Concern Kenya Country Director Anne O’Mahony says, “In an emergency, we want to respond as quickly as possible. This technology can get the money here in minutes, as opposed to the very difficult logistics and high transportation costs of shipping in food.”

Says O’Mahony of the new pilot launched by Concern and the Government of Kenya in Nairobi in January 2010, “Before this pilot, in Kenya’s informal settlements and slums, there was no social welfare and no safety nets of any kinds. If you didn’t have money, you didn’t eat.” Building on the learning and advocacy of Concern’s first cash transfer, the Government of Kenya has for the first time provided the equivalent of €6 million in funding to provide social welfare programs such as this one to protect the most vulnerable from further shocks and abject poverty. Concern Worldwide is proud to be part of history BY having been asked by the Kenyan Government to help implement this program.