Are Cash Transfers Transforming Humanitarian Assistance?
Field Perspectives and Future Directions
Summary of the Webinar held on Thursday 8th October 2015
It has been demonstrated in many contexts that giving aid directly in the form of cash is both an effective and efficient way to maximise the impact of humanitarian assistance, but a recent multi-partner study identified that only 6% of total humanitarian spending goes on cash.
The use of cash in humanitarian response has many benefits: it maintains dignity and provides affected people with the ability to prioritise their own needs; it stimulates local economies; it gets assistance to people rapidly; and it reduces the overheads involved in delivering relief items.
This webinar, attended by over 100 people from more than 40 countries in Asia, Africa and the Middle-East, looked at the mechanisms and modalities of cash assistance, with a particular focus on how cash was planned and implemented following the Ghorka earthquake in Nepal. It summarised the use of cash in humanitarian crises and introduced discussions on expanding the role of cash assistance in the future.
You can download a printer friendly version of this summary (PDF - 375 Kb) or listen to the presentations below.
Technical Advisor, Cash Learning Partnership (CaLP)
CaLP is a global partnership of humanitarian actors on policy, practice and research on CT programming.
Listen to or download Ms. Jackson's presentation:
- There has been a rapid increase in the use of CT, in the volume of cash distributed, and the number and diversity of contexts where CT is used.
- Experience, research and evidence collection combined with the use of technology and improved communications have driven a positive change in the policy environment for CT.
Cash assistance modalities and interventions
- Definition: “Cash and voucher transfers are used to meet basic food and non-food needs or to purchase assets enabling people to resume economic activity” (Sphere standards, 2011)
- Cash vs Vouchers: Cash offers broader choice to beneficiaries, it is more fungible and flexible. Vouchers are more restrictive in their nature. They may be a better option when a specific desired outcome is deemed critical or where market recovery is needed.
- Conditions and prerequisites: CT may be conditional (for ex. if work is required) or unconditional, vouchers may be restricted (for ex. if they must be spent on food or shelter material) or unrestricted.
The pros and cons of cash assistance
- Pros: security, accountability to donors, self-reliance & dignity, shared decision making, economic integration, choice, inclusion
- Cons: insecurity, fraud and diversion, dependency, HH conflict, community conflict, abuse of assistance, exclusion
- Feasibility and appropriateness: decisions on CT depend on the quality of your assessment of the situation and the analysis of vulnerabilities and needs. How beneficiaries make, save and spend their money is critical to understanding the expected impact of CTP.
How cash fits into the humanitarian programme cycle
In addition to a careful and accurate needs and vulnerability analysis, preparedness must focus on the…
- market: can beneficiaries access right commodities/services, at right time/price, quantity and quality?
- financial service providers: can they deliver CT in necessary volume/speed, with adequate accounting?
- technology: what technology, platforms and opportunities are available?
- internal capacity: do NGOs, the UN and governments have systems, processes and HR to deliver CTP?
Listen to or download Mr. McGoldrick's presentation:
- We accept the findings & recommendations of the High Level Panel Report on Humanitarian CT (PDF).
- In Nepal, over $25 million (USD) of cash were distributed through more than 30 INGOs and UN agencies, 9 million of which were multisectoral and conditional cash grants.
- We more than doubled the 6% global average for CT in humanitarian assistance. How do we scale up?
- Systems and technology: they were in place for delivering cash: over 30% of Nepal’s GDP comes from overseas remittances from 400,000 Nepalese migrant workers in the Gulf & elsewhere. But…
- Financial service providers: faced challenges in limited geographical coverage and damage done to the banking sector by earthquake; only about 30% of population has access to financial services (4 million Nepalese don’t have papers to open a bank account). Thus a lot of cash in envelopes to deliver to very remote areas. Some NGOs contracted local retailers for CT. Others used local participative systems.
- Coordination and oversight with the government: OCHA set up a Cash Coordination group in Kathmandu linked to the 3 humanitarian hubs close to the affected populations. They developed multipurpose grant operation guidelines and shared them widely.
- Coordination between clusters: questioning to what extent the Cash Coordination group managed to break down some of the more counterproductive divisions between clusters, as recommended by the High Level Panel; no evidence of this happening in Nepal.
- Information collection, targeting & monitoring: lack of coordination; need a system for next time.
- Preparedness: challenging within the Nepal political context (no local elections for 16 years and national government in a transition); government authorities were overwhelmed by the emergency; introducing CT with no preparation work added confusion.
- Accountability and transparency: mechanisms will have to be scaled up for next time.
Listen to or download Ms. Dhakal's presentation:
- DCA distributed $1.3 million using mobile phones in 4 districts in Western and Central Nepal (out of 14 seriously affected).
- Started CT after 5 weeks in one of the most remote & highly affected Village Development Committees (VDC)
- Market: was functional with everything for construction - shelter was a pressing need. Many households had already built. They had freedom to spend the money on what they wanted.
- Mobile phones: DCA used this system to facilitate transparency, security and real-time monitoring.
- Private sector: was an efficient way to bring cash to 1476 households and benefit +8000 people.
- Government: DCA mobilized 80 government officials from 9 VDC and 4 municipalities to support CT.
- Gender: few men working abroad returned home after the earthquake. In their absence, targeting women heads of households with CT was challenging. 29% of recipients were women and 71% men.
Regional Director (South Asia), Help Age International
Listen to or download Mr. McGeachie's presentation:
- Preparedness: Help Age International hadn’t made any preparation for CT before the earthquake. With no particular expertise in humanitarian support and little experience in Nepal, we could do our 1st unconditional CT 13 days after the earthquake.
- Partnerships: thanks to very good local partners and huge amount of cooperation from the local government, by the 5th of June, Help Age had distributed over $800,000 to +10,500 beneficiaries.
- Learnings: ensuring that local markets are functioning (some staff visited them) was crucial. Anticipating the needs of the target group of older people (medicine, health care, food and shelter) was too. About 29% of victims were people over 60 when they account for only 8% of the total population.
- Challenges: understanding the local political dynamics can make or break your work; working with the private sector for cash distribution is essential for efficiency and security reasons.
- Monitoring: as expected, most beneficiaries spent money on food, shelter, medicine, paid-for labour.
- Conclusion: you don’t need much knowledge and expertise to do CT. If you have the right attitude and avoid some mistakes, you can get things done quickly.
Senior Livelihoods and Disaster Resilience Advisor, DFID - CHASE (Conflict Humanitarian and Security Department)
Listen to or download Mr. Waites' presentation:
- The reason DFID put together the High Level Panel on Humanitarian CT: it felt that problems were more related to the political economy of the humanitarian system of agencies and NGOs.
- Scaling up: The Panel Report is called ‘Doing cash differently’ because the real question is how do we move from 6% to 30-40-50% of aid delivered in the form of CT, depending on context.
- Cash and vouchers: they’re totally different; vouchers take away freedom of choice from beneficiaries.
- Private sector: it’s not being used enough; the NGOs and the UN are not the only channels for CT.
- Technology: digital cash, when possible, is a lot safer, less prone to fraud than in-kind delivery.
- Coordination & alignment: we need large-scale coherence and a competitive system (tenders). We’re doing CT in a very fragmented way. How can we have all donors working on one platform?
- Preparedness: DFID will be working more closely with other donors, political leaders, the private sector and innovation companies to better prepare for future emergencies.
QUESTIONS AND ANSWERS
Listen to or download the webinar's Q&A:
- Lessons learned: need to increase preparedness, know the market, work with private sector
- Protection issues: not so much an issue in Nepal, even with cash in envelopes. In countries like Somalia, e-payments through mobile phones must be preferred when possible.