Beating food insecurity will require people-centered financial inclusion policy

Guadalupe Galambos, Economist, United Nations World Food Programme

Last year, the World Food Programme, the world’s largest humanitarian organization,  transferred three billion dollars to 57 million people in 76 countries.

Why? Because we’ve learnt that a very efficient way  to help people to meet their basic food and other essential needs is to transfer money directly to their own accounts.

The communities we work with are disadvantaged and marginalized, often on the move or in hard-to-reach areas. Their contexts are complex – they may be dealing with any combination of conflict, natural disasters, social or economic upheaval.

Transfering cash physically is not the safest or most sustainable solution in many of these contexts, so we aim to get money to people-owned accounts, where possible digitally. But making those transfers, and then getting people to use financial services, is challenging. People face a number of barriers, including access, language and cultural barriers.

The first step to overcoming those barriers involves listening. It means engaging with affected communities to understand their difficulties in accessing and using financial services. This is central to a people-centered approach.

Often, the issues people share can only (or best) be solved through policy and regulation. That’s why, for the World Food Programme, collaborating with the AFI network of central banks and financial regulators is critical.

I can share some successful examples. In many countries, refugees are not allowed to open financial accounts. We have collaborated with central banks to explore ways to adapt know-your-customer regulations, facilitating access for marginalized groups such as refugees to open accounts and to receive assistance from us, or from their governments, in their own accounts.

We met women who wanted to become financial agents to support and serve other women in the communities, but who couldn’t meet the requirements. WFP therefore advocated  with central banks for changing agent licensing frameworks, which delivers real impact. When we make it easier for women to become agents, female clients in places like refugee camps feel much more confident and comfortable in dealing with agents.

Another thing we’re doing with both central banks and governments involves financial literacy campaigns, often targeted to women or other disadvantaged or marginalized groups, and which work to overcome language and cultural barriers.

I see our engagement with central banks as mutually beneficial. For WFP, it’s an enabler for more inclusive and more efficient humanitarian and government payments. And for central banks, it’s a way to implement people-centered policies and regulation, which are key to ensuring no one is left behind.

Working together to inform gender-sensitive financial consumer protection frameworks and policies can ensure a safe environment for humanitarian and government payments, protecting the most disadvantaged and marginalized from risks.  

At the World Food Programme, we’ve been championing people-centered programs and policies in recent years. Rather than designing programmes and solutions based on what we think people’s needs and challenges are, we speak to those people in order to understand the root causes of the challenges they face, and identify opportunities.

If we’re calling on financial services policymakers and regulators to embrace a people-centered approach, it’s because we’ve seen its positive impact around the world. We see working together with AFI and its members as a key element to advancing progress on food security and financial inclusion.

You can learn more about the World Food Programme’s money transfer activities on their website and more specifically on digital financial inclusion and women’s economic empowerment on the dedicated page.