Cash money for people in need: it works!

Chris Simoens
04 April 2018
Giving cash to people in need is on the rise. Years of evaluation have shown that the disadvantages do not outweigh the numerous advantages. Belgium, too, is doing its bit.

 

Giving cash to people in need is not a new idea. Already in the 1960s, organisations paid people in exchange for the work they did, such as helping to build a road. This was known as 'cash for work'. However, it is only since the beginning of the Syrian crisis in 2011 that the use of cash has really started to make its way into the humanitarian sector. Mamta Khanal Basnet, cash expert and project manager of CashCap, a specialised project at the Norwegian Refugee Council (NRC), confirms: "In 2006, only 6 percent of humanitarian aid was provided as cash money, but by 2016, this share had risen to 10.3 percent and it still continues to grow."

Belgium aims to provide 30 percent of its humanitarian aid in the form of cash money by 2020. Using more cash is also part of the Grand Bargain, a ten-point plan that was agreed on in 2016 to make humanitarian aid more effective. For each intervention, Belgium will ask the question: "Why not cash? If not now, then when?" Not using cash will thus have to be thoroughly justified.

"In 2006, only 6 percent of humanitarian aid was provided as cash money, but by 2016, this share had risen to 10.3 percent and it still continues to grow."

 

Mamta Khanal Basnet

Mamata Khanal Basnet
© NRC

Do no harm

What are the benefits of using cash? Basnet: "When people get money, you give them dignity and opportunities because they can choose what they want to buy with that money. When you give them goods, you actually say: we think you need this and you have to accept it. Giving money is also much easier because you don't have to transport goods, such as food or materials, and you don't need storage space. And last but not least, you also support local markets, because the beneficiaries buy what they need on the spot."

When distributing cash, one cannot help but think of the disadvantages too: will people buy alcohol or useless luxury items? And how do you guarantee that the right people get the money? According to Mamta Basnet, years of evaluation have shown that people usually do spend the money on useful things. Basnet: "It should also be noted that we thoroughly examine the situation before we decide to give the cash. For example, we will not grant any money if the goods are not available locally. We also want to be sure that we don’t cause any damage: we follow the so-called 'do no harm' principle. That is why we won’t give money when there is too big a risk of exploitation or domestic violence, such as an anger outburst if the husband has an alcohol problem. In Greece, too, it took a while before we decided to give the refugees cash money, since there was a real risk that the money would end up in the hands of smugglers."

Humanitarian organisations often donate money in the form of gift vouchers that people in need can only use to purchase specific items such as food or shelter.

It should also be noted that we thoroughly examine the situation before we decide to give the cash. For example, we will not grant any money if the goods are not available locally. We also want to be sure that we don’t cause any damage: 'do no harm'.

Western Union

In order to avoid theft, humanitarian organisations prefer not to give the money directly to the people themselves. Beneficiaries are usually asked to go to a local agency. If there is no real bank, companies specialising in global money transfers such as Western Union, or Hawala in the Middle East, will be called upon. Basnet: "Let’s say, a family with five children living in a Syrian refugee camp of the UN High Commissioner for Refugees (UNHCR) is entitled to help. The head of the family will then be able to collect his money with his UNHCR identification card at the local Hawala office. The office has received instructions on what that person may receive. If we think the risk of robbery is too high, we prefer to not give too much money in one go: we prefer to give 250 euros twice, rather than 500 euros once. If banks with automated teller machines are available, the distribution of money is easier, of course."

Humanitarian organisations thus adapt to what is locally available. In Jordan, for example, they work in a rather sophisticated way, by identifying the person through a scan of the iris and by using bank cards. But even in difficult countries such as South Sudan, DR Congo, the Central African Republic, Somalia, Yemen and Syria, it works well making use of use local money transfer systems. Cash money has therefore become an important instrument for making emergency aid more effective, although it cannot be applied everywhere.

 

Belgium opts for cash money

 

Humanitarian needs are increasing worldwide. That is why Belgium wants to work on more effective aid, which can be achieved through innovation, among other things. In 2018, Belgium will spend 20 million euros on innovative projects, such as the 'CashCap' project of the Norwegian Refugee Council. CashCap has amassed enormous expertise when it comes to the use of cash in humanitarian crises. Belgium supports, among other things, the training of instructors and allows CashCap to send out its experts at the request of humanitarian organisations, such as UNICEF and Oxfam, that do not yet have sufficient expertise to put help in practice through cash money.

Humanitarian aid Innovation
Back People
Imprimer
About the same theme - Article 33 /45 Stress call from Filipino farmers