In 2016-2017, we delivered cash transfers to one of the remotest and most operationally challenging locations we have ever worked in, reaching some of the poorest recipients we have ever met. In this series of posts, we look at why we did it, how we did it, and what we learned from the experience.

At the end of our program in the remote north of Uganda, we met with recipients to understand more about their experience and the impact they witnessed in local markets and the surrounding community. In this post we look at what we learned.

A barrier to cash programming has been the perceived lack of viability of local markets. We found recipients comfortably capable of overcoming this, willing to travel considerable distances to put their money to work. 45% of our recipients travelled 350km to a major town where they could buy larger items. The size of the transfer, around $900, allowed them to both cover their transport costs and invest in a balanced portfolio of short- and long-term needs, from business and agricultural investment, to improving homes and paying school fees. Reporting on their experience of receiving cash, feedback varied from a general sense of improved happiness, to better relationships with family and pride at investing in farms and businesses.

Markets may have been weak to begin with, but recipients reported evidence of dramatic change here too. The number of shops operating in the area grew from seven to 40. 66% of recipients reported seeing more goods at local markets, and 86% more services. Mobile money agents recorded a 51% increase in transactions, possibly indicative of an economic multiplier. However, while in non-remote areas there is no evidence that cash transfers cause price rises, the available evidence on remote areas suggests that short-term, localised price increases can occur. We saw evidence of this, with recipients reporting price increases across a handful of staple goods. There is upside: local farmers and traders benefit from increased demand; but there is downside too, especially if non-recipients are priced out of staple goods. In this project, we sought to mitigate this by enrolling all households within the community, instead of applying eligibility criteria to exclude ‘wealthier’ households (a relative term in remote northern Uganda anyway…). This meant fewer non-recipients would experience any price rises at local markets. It is also an approach recently recommended in a paper looking at impact on non-recipients in remote areas.

This project was small, with a limited remit: to test the operational feasibility of sending cash to remote areas, not to generate experimental evidence. We were excited by what we saw. In spite of physical remoteness, a lack of financial infrastructure, and weak local markets: 550 households were given a life-changing sum of money and were able to spend it; mobile money worked; and small, local markets were responsive, showing evidence of greater vibrancy.

This series began with Ban Ki Moon’s call to world leaders that cash should become “the default method of support” when “markets and operational contexts permit”. Here, we present a case-study of working in a context that does not necessarily “permit” cash. Our experience of doing so leads us to a simple, but possibly transformative recommendation. When faced by a challenging operational context, we should not ask whether it “permits” cash. Instead, we should ask whether the context could be transformed by it. If we don’t, we’ll be stuck forever in a catch-22: markets need investment to thrive, but will get no investment until they are thriving. If we do, we could deliver much-needed transformative support to some of the world’s poorest communities, forgotten at its remotest reaches.

For those keen to get deeper into the detail, you can read the technical report here.

Josh Williams is GiveDirectly’s Field Director in Uganda, and led our remote payments project.

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