C The Cash Learning Partnership THE STATE OF THE WORLD’S CASH REPORT – ANNEX: CASE STUDIES 3 ZIMBABWE – LESSONS FROM THE ‘EMERGENCY CASH FIRST RESPONSE’ TO DROUGHT-AFFECTED COMMUNITIES Two seasons of failed rains in 2015 and 2016 led to an acute food insecurity crisis in Zimbabwe, which reached emergency levels in February 2016. The drought crisis reduced household subsistence production, income and livelihood activities, constrained access to food, and contributed to livestock deaths. From August 2015 to May 2017, CARE Zimbabwe, in partnership with World Vision International (WVI) and the UK Department for International Development (DFID) implemented a monthly unconditional and unrestricted cash transfer intervention to address basic food and nutrition needs, enable households to cope with food shocks and enhance asset retention. In a context where in-kind food aid still dominates most emergency responses, this reached over 400,000 people and is by far the largest humanitarian cash transfer intervention carried out in Zimbabwe. In June 2016, a national cash liquidity crisis hit Zimbabwe, peaking in October and leading to a shortage of physical currency across the country, limits on withdrawals, and restrictions on transfers outside of Zimbabwe. Despite this, CARE successfully continued providing cash transfers, which were delivered in partnership with two mobile money service providers. This experience provides the following lessons of relevance to the State of the World’s Cash report: Multiple delivery partners were necessary for effective programming: In this context, CARE welcomed flexibility on the part of the donor to establish agreements with different financial service providers to ensure optimum coverage. The vast majority of households were served through the largest mobile network operator, Econet. In areas where Econet network coverage was poor, CARE worked with NetOne. Adaptations of mobile money providers enabled the continued relevance of CTP during the liquidity crisis: Mobile money proved to be a highly flexible way to deliver cash in the face of the Zimbabwe liquidity crisis. As ‘cashing out’ for beneficiaries (and other mobile money users) became more difficult, demand grew for these e-purchasing services, allowing households to purchase food and other goods electronically with mobile money from their e-wallet without reliance on physical cash. Households still needed some currency, since some services – schools, hospitals, transport, grinding mills and the government’s Grain Marketing Board – were slower to adapt to the crisis and didn’t always accept e-money. To manage this, mobile money agents (licensed to cash in and cash out) and mobile money merchants (licensed to accept e-money for retail transactions) adapted their services to the liquidity crisis. — Mobile operators mobilized and registered new agencies and merchants. — Traders who were not registered to accept e-money for purchases instead accepted transfers to their own personal mobile money accounts and added on their own fees. — Cash agents who were not registered as merchants started informal small retail businesses, stocking goods that customers could buy and ‘cashing out’ the change rather than the whole transfer. — Some cash agents charged a higher fee for cashing out than the regulated amount. Investments to improve the enabling environment for mobile money could improve the effective application of these services during emergencies: CARE chose mobile money as the delivery mechanism, given the extensive mobile network coverage across the country and familiarity with money transfer services of most Zimbabweans. Eighty-five percent of the adult population subscribe to mobile services, and in rural areas, people were mostly familiar with the ‘cash out’ service, having received remittances from relatives. However, this wasn’t a frequent practice and many beneficiaries were not familiar with the full transaction process, so they still required extensive support from the project team in the initial months. This was possible to provide, since CARE’s programme involved repeated cash transfers over many months. The programme invested in community gender and accountability focal points who were trained to trouble shoot simple problems. Awareness or use of mobile money for buying goods and services through e-wallets was much more limited before the project, as this side of the mobile network operators( MNO) business model was not so well developed. However, by March 2017, 69% of programme beneficiaries were making e-purchases, compared to just 17% at 9