Cash Takes on COVID-19
Two years of damage wrought by COVID-19 have made humanitarian aid more necessary but also more challenging than ever. Fortunately, cash is here to help, with cash-based assistance becoming the go-to relief option, saving lives and lessening the pandemic’s impact on the most vulnerable local economies.
A paper published in Disasters Journal explores the positive impact of increased cash assistance, noting its role in supporting financial inclusion and the benefits of its flexibility and ability to be readily used and accepted by anyone.
Cash has proven to be an adaptable means of saving lives and supporting livelihoods and mitigating the pandemic’s impacts on local economies while giving recipients the flexibility to decide what they require.
The authors note the use of humanitarian cash assistance has rapidly scaled up in recent years, more than doubling from $2.8 billion in 2016 to $6.3 billion in 2020. From the beginning of the pandemic, this accelerated further, with one example being the International Rescue Committee in Yemen adding 30 percent to its cash assistance between March and September 2020.
The delivery of social protection as cash transfers is well established, but the pandemic saw a huge upturn in scale.
A 2020 analysis by the United Nations Refugee Agency (UNHCR) found 80 percent of respondents preferred cash assistance and 88 percent were able to locate everything they needed in local markets, meaning they could entirely meet their needs only using cash assistance. The report also cites data from a 2021 study in Colombia that 72 to 80 percent of households placed cash assistance top of their list of needs, varying depending on their immediate requirements (such as food or shelter).
The authors also raise potential challenges posed by cashless aid, asking who exactly will benefit from cashless options: the recipients or the service providers? Problems include opportunities for surveillance and discrimination, with the paper concluding these require careful consideration and further research.
In the meantime, digital tools are supporting the delivery of physical money to those in need, with the paper noting they are increasingly being deployed to ensure cash reaches the right people. One example cited is the use of codes that can then be used to redeem cash, with remote verification via text messages being used successfully in Honduras to prioritise households to receive cash.