Mukuru partners with aid organisations to deliver $1bn in value transfers

Mukuru, Africa’s leading remittance and money transfer provider, is collaborating with some of the world’s biggest suppliers of humanitarian aid to distribute approximately USD1 billion of aid in the next five years to recipients in Zimbabwe, Malawi, Botswana, Zambia, Mozambique, Lesotho and Kenya.

Mukuru will use its reach and capabilities to deliver a seamless process that guarantees on-time payments to the world’s most vulnerable – as many as 15 million individuals each year.

Michael Scott, Mukuru Group Head of Commercial, says: “We’re expecting to assist NGOs with approximately USD 200 million in value transfers (cash and digital) annually over the next five years, bearing in mind that aid comes in a number of forms (cash, goods and services) and the desired means of distribution shifts between these forms in response to changes in the field.”

Mukuru – aid agency synergy

Today, the bulk of humanitarian work is not a response to sudden disaster. Countries caught up in protracted crises of five years or more have gone from 13 to 31 in the last 15 years. In these circumstances, aid in cash that allows recipients to buy food, pay rent and buy what they need locally is far more effective at helping people survive and rebuild their lives than consignments of food, water, shelter and clothes. An increasing number of agencies are now building cash payments into their emergency response planning.

In 2020, a number of United Nations (UN) agencies and organisations including World Food Programme, Unicef, Finmark Trust and Action Contre La Faim began to work with Mukuru – an Africa-based fintech company that for almost two decades has enabled migrant workers to send money home to their families via a formal remittance system that uses dynamic technology and an extensive Africa footprint to deliver safe and easy-to-use products and services.

Traditionally, migrant workers were forced to trust the goodwill of strangers, paying middlemen and taxi drivers to get desperately-needed money home to their families. Mukuru presents an alternative, safer way that enables a sender to place and pay for a cash remittance order which their recipient can access at a Mukuru branch, retail partner or payout booth in peri-urban and rural areas.

The common thread of supporting the financial wellbeing of some of the world’s most vulnerable people created a natural synergy between the money transfer company and partner humanitarian aid organisations.

Scott says: “On the one hand, Mukuru is constantly innovating to stay ahead of real-time social, regulatory and legislative changes in more than 20 recipient countries. This means building flexibility and responsiveness into every business process. On the other hand, end-to-end accountability and full auditability is paramount to the long-term success of the products and services we create for our customers, whether in the business-to-customer or business-to-business space.”

Move to aid cash payments

The new product line is the result of a trifecta of change in the humanitarian and money transfer sectors.

1. An upswing in the volume of aid distributed across the globe that is putting the humanitarian system under enormous strain. (An estimated one billion people in countries affected by long-term humanitarian crises need around $30 billion in aid each year to survive.)
2. Aid organisations are urgently looking for new ways to protect the lives and dignity of affected individuals while ensuring aid is spent efficiently. The result is a switch where possible from supporting crisis-affected people with physical commodities, to cash payments.
3. Changes in technology and access to financial services are presenting new ways for humanitarian support to reach people in need, whether as an envelope of cash, a money card or electronic money transfer to a mobile phone.

Maximising humanitarian impact with a system of cash transfers

The expansion into Enterprise Payments is a natural progression for Mukuru. They are licensed across multiple territories, have vast experience in instant cash availability (even in poor cash liquidity environments), and are passionate about enabling the journey towards digitisation for their customers.

Scott says: “Our cash transfer systems offer our aid partners convenient online disbursement of cash aid, with built-in operational efficiencies, as well as security and risk prevention; this includes fraud detection, anti-money laundering and authentication tools. Our ability to provide a fully-auditable payments infrastructure that allows organisations to deliver large numbers of cash payments quickly and reliably to vulnerable people in under-served communities is what caught the eye of our humanitarian aid organisation partners.”

Ariane Luff, Zimbabwe Country Manager for Action Contre La Faim (Action Against Hunger), says: “It was Mukuru’s practical approach to money transfers and their scalability that made them an attractive business partner.

“They are able to leverage their independent cash supply chain to ensure regular payouts and have proven to be highly responsive to the unique issues faced by aid agencies. Having easy access to senior managers is crucial for aid organisations that need quick answers to changing situations, and Mukuru has been willing to listen and learn, whether this is making quick adjustments to longer queues by bringing in additional payout booths, or extended payout hours for aid recipients.”