Cash-based assistance is an increasingly popular method of supporting people in crisis, providing a rapid way to reach those in need while simultaneously bolstering local economies. In 2020, such programmes were more important than ever.
Responding to the COVID-19 pandemic, many countries have turned to cash transfers, long used within the humanitarian sector to help prevent communities in crisis from slipping into deep poverty. Among social assistance provided by governments in 2020, cash transfers were the most widely used, with 143 such programmes operating in 81 countries.
Cash can reach recipients quickly, with relatively few up-front costs compared to food aid and vouchers. A United Nations World Food Programme (WFP) study also found people ate a more varied diet when given cash-based assistance rather than food aid, and cash has the added benefit of supporting local economies.
The Cash Learning Partnership reports aid agencies distributed $5.6 billion in cash and voucher assistance in 2019, which has doubled in the years since 2016. From 2020, the COVID-19 response has since led to a further scaling up of cash assistance.
In April 2020, India launched a cash transfer programme that distributed 500-rupee payments ($7 or €5.70) to over 200 million women enrolled in its financial inclusion programmes. Kenya currently gives over a million citizens 2,000 Kenyan shillings ($18 or €15) each month. According to the World Bank, similar initiatives have been rolled out across Burkina Faso, Columbia, Egypt, El Salvador, Haiti and Madagascar.
The New Humanitarian reports that the WFP is one of the largest agencies employing cash, with its distribution rising from $10 million in 2009 to $2.1 billion—representing 38 percent of its total assistance portfolio—in 2019.
In 2020, the UN Refugee Agency’s provided $3 billion of cash assistance to more than 25 million people, responding to COVID-19 by scaling up or launching cash in 65 countries. In 2021, it will roll out an additional 20 operations, and reports that UNICEF will start using its Cash Management System later this year.