Digital financial transfers and vouchers will now be the new mode of payments adopted by the Food and Agriculture Organisation (FAO) to at least 10 of its decentralised offices as well as rural farmers in their assistance programs.
FAO earlier committed to increasing its financial deliveries using digital methods, by 50 per cent.
Mobile money transfer services are the latest modes of sending money globally, increasing the efficiency of delivering cash to beneficiaries.
For instance, FAO uses money transfers in Somalia where cash is delivered directly to the beneficiaries’ cell phones.
This allows families to purchase the goods and services they need the most in their local markets.
Recipients are registered using biometric data, which is evolving into a voice-recognition system, making this a safer, cheaper and better-targeted means of conveyance than physical delivery and distribution.
At least 19 million people in 58 countries have received cash and voucher payments from FAO.
In 2019, about half of USD50 million was transferred digitally to 2.8 million beneficiaries, in 29 countries.
FAO is a member of the Better Than Cash Alliance, a partnership between governments, companies, and international organisations that accelerates the transition from cash to digital payments in a way designated to generate savings and boost transparency and efficiency.
Digital transfers are expected to reduce poverty and drive inclusive growth.
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According to Dr Qu, cash in the digitised form, will offer great benefits and open numerous doors for people engaged in small-scale agri-food activities. It is a road to resilience.
“We must make sure that farmers and rural populations are empowered to participate in and benefit from the digital world”, said Dongyu Qu, director-general FAO.
Experts at the Better Than Cash Alliance, believe that farmers across the globe will immensely benefit from digital cash transfers.
“Millions of small-holder farmers will now get the assistance they need quickly, safely and transparently. The farmers, many of whom are women, will access a wider range of related services to improve their livelihoods”, said Dr Ruth Goodwin-Groen, managing director of the Better Than Cash Alliance.
Scaling up digitised financial transfers enables direct contact to beneficiaries, many of whom have no bank account. Physical cash distribution, which entails transporting banknotes to hard-to-reach areas, sometimes amid conflicts or in the wake of natural disasters, and engaging agents to act as distributors, can be avoided.
Digital payment options continue to grow, accelerating our ability to reach the unbanked while mitigating financial risks.
Building broader digital networks will thus allow for broader participation, intensifying the pace of adoption and transformation of local economies.