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The Resilience of Cash Before, During, and After Hurricane Ida

Categories : Cash and Crises, Cash does not require a technology infrastructure, Cash is a contingency and fall-back solution, Cash is a public good, Cash is available to all users
December 27, 2021
Tags : Cash and Crises, Costs of payments, disaster recovery, Humanitarian, US
After Hurricane Ida’s landfall on the coast of Louisiana, cash remained the most reliable payment instrument during disaster and relief recovery efforts.
Manuel A. Bautista-González

Ph.D. in U.S. History, Columbia University in the City of New York

Post-Doctoral Researcher in Global Correspondent Banking, 1870-2000 – Mexico and South America, University of Oxford

This post is also available in: Spanish

Emergency Payday Loans Aren’t an Option if You Don’t Have a Credit History

Robert Owens hoped to evacuate Baton Rouge (the capital of Louisiana) with his wife, mother-in-law, roommates, and pets. However, they did not have the money to escape. “Our bank account is empty – we can’t afford to leave,” Owens said.

Owens was denied a payday loan from ACE Cash Express due to insufficient credit history. “The fact that we are not middle class or above, it just kind of keeps coming back to bite us over and over again, in so many different directions and ways – a simple payday advance being one of them. It’s like we’re having to pay for being poor, even though we’re trying to not be poor,” he said.

Most of his neighbours were in the same situation. “There [are] people who have funds to lean on or are able to get out of here, but there’s a big chunk of people that are lower-income that don’t have a savings account to fall on. We’re left behind,” Owens said.

Widespread Electricity and Internet Outages

Public authorities in Mississippi and Louisiana were very concerned about extreme heat and the lack of air conditioning for vulnerable populations. New Orleans officials urged those who had fled the city to stay away indefinitely until recovery efforts had advanced. But this was no comfort for those left behind.

Relief Efforts Made Possible (and More Difficult) by Retail Payment Instruments

Relief efforts to support the affected communities have relied on a combination of payment instruments, with varying degrees of success:

Cash and Supplies

Experts recommended those interested in helping disaster relief, and recovery efforts donate cash first and assist with supplies only in those communities without supplies or stocks.

However, some relief efforts combined cash and supplies to affected communities.

Donating supplies in a disaster can be positive if they come from nearby. However, they can also raise the cost of the response cycle, complicating humanitarian logistics.

“We’re learning models of direct cash assistance, especially in a crisis, can be quite effective. We should not think about one model necessarily supplanting but rather supplementing, complementing and really giving us much more impact on the families that are in need,” said Una Osili, Efroymson Chair in Philanthropy at Indiana University.

This post is also available in: Spanish