In this study, we have developed a tool for BDRCS to choose the ideal mechanisms for cash-based intervention (CBI) during and after the disaster in different disaster and geographical contexts.
BDRCS has been providing cash-based interventions (CBI) since 2007, over the last decade BDRCS has transformed its beneficiary selection mechanism, the cash delivery mechanism, and the accountability system. BDRCS has a robust process of beneficiary selection, when a disaster hits in a certain area, the volunteers carry out an initial damage assessment and feedback information to the BDRCS HQ. The BDRCS HQ houses the National Disaster Response Team (NDRT) which evaluates the damage caused by the disaster for mobilizing initial food and medical support. The beneficiary data are then collected through Kobo toolbox with certain criterions and the final beneficiary list is shared with the BDRCS HQ for approval. These entire process takes about 2 months. The beneficiaries affected by disasters urgently needs this cash support to recover from the damage to the livelihood, healthcare, and accessibility to agriculture inputs.
BDRCS uses different cash delivery mechanism in different contexts.
The most common cash delivery mechanism is through Bangladesh Post Office (BPO). BPO has presence across Bangladesh up to the union level. BPO relieves the BDRCS of handling the cash and has reliable liquidity to ensure that many beneficiaries can be delivered cash in a short period of notice. BPO also has very low transaction cost. However, a significant disadvantage of BPO is that the beneficiaries must collect the cash by traveling long distance particularly those living in remote areas. BPO is also understaffed and in case of any grievances the procedures for corrective measure takes a very long time. The Mobile Financial Service (MFS) is the most preferred way CBI from the beneficiary perspective. MFS provides the opportunity for the beneficiaries to collect their cash from their nearest agent. However, MFS has high transaction cost and there are significant risks of pilferage by frauds and hackers. Most of the beneficiaries do not have the digital financial literacy, so the pin codes are often compromised which makes the beneficiaries vulnerable to theft and fraud. The most common problem with MFS is that the agents do not have the sufficient liquidity to service the cash delivery request to the agents. The liquidity of the agents is not directly influenced by the MFS company or BDRCS but rather it depends on market forces. If the MFS agent is operating in a place where there are more agent concentration compared to volume of transaction, then the agents are likely to main low volume of cash.
Agent banking is rapidly expanding in Bangladesh, BDRCS has experimented with agent banking in Teknaf. The cheque transfer through agent banking is a reliable mechanism for BDRCS to transfer money to the bank account of the beneficiaries. Agent banking significantly reduces the security risk of carrying cash and diminishes the risk of cash transfer to wrong beneficiaries. However, like MFS the agent banks lack the liquidity to service the cheque from the beneficiaries. Based on the covariate analysis of different dimension of disaster and the characteristics of cash delivery mechanism. BPO is preferred during extreme weather events where there is possibility of non-functionality of markets particularly at upazila and union level. MFS and Agent banking are preferred choice in the urban and semi-urban areas irrespective of disaster category. For frequent weather events and seasonal flood MFS is preferred in the most the remote areas.
There are different challenges and opportunities with different cash delivery mechanism but there are possibilities of reducing bottlenecks to ensure more smooth cash delivery. For instance, if the beneficiaries are oriented on digital financial literacy, then the possibility of theft, fraud and wrong transfers to mobile numbers can be significantly reduced. Finally, the acceptance of BPO can be increased if they can delivery cash through temporary offices set up during the cash delivery.
