Cash-based assistance: the power of choice
Blanche has had her « table », how she calls her shop in all modesty, for the past four years, tucked in a residential neighbourhood of the capital Bangui. Products have become rare in recent months and prices of food and basic commodities have soared across the Central African Republic (CAR) – consequence of the latest crisis that has hit the country since December.
A few clicks with a great result
Single mother of a 11-year old girl, Blanche has received 150,000 FCFA, a generous US$ 280, through a project funded by the CAR Humanitarian Fund and implemented by the NGO Mercy Corps. Blanche received it via electronic transfers – a first-ever for the 37-year old. Thankfully, she already had a cell phone and with the help of the NGO, she quickly understood the few clicks needed to turn a SMS into cash at a nearby vendor of phone credit. “Simply fabulous and so easy,” says the woman and smiles, “and I got to choose what I want to buy.” With the grant, she replenished her stocks and now offers a more varied selection of food at her shop. Groundnuts, pumpkin seeds, cassava, dried fish and caterpillars – a local specialty – neatly piled up in front of her. The availability of the goods is striking. With the revenue, she provides for her family.
Making the case for financial assistance
Globally, such cash-based interventions (CBI) make up only 6 per cent of the US$ 25 billion humanitarian funding, according to the Cash Learning Partnership. CBI include the distribution of money or vouchers – the latter often coupled with a fair with goods to choose from – and the transfer of electronic money, usually done via a mobile network operator. The remaining 94 per cent of today’s humanitarian aid takes the form of in-kind assistance, such as food rations, shelter materials, seeds and tools or household items. But the trend is shifting towards CBI because of the evidence of its advantages.
Cash assistance allows people to choose what they need, when they need it, under the condition that local markets are functioning and products available at a stable price. It puts power in the hands of those who need it most and allows people to spend money on what matters most to them. Apart from the direct advantages of CBI for the beneficiaries, local spending of cash assistance often functions as a multiplier in the community.
A look at the Central African Republic
In CAR, over half of the displaced people living at sites prefer cash-based food assistance over receiving food products. On the other hand, three out of four prefer in-kind health assistance due to the lack of qualified personnel and medications. In view of these and similar findings, humanitarian assistance in CAR has started to shift towards CBI. Of the 1.6 million Central Africans who received humanitarian assistance in 2020, about one in two (47 per cent) received some sort of CBI. Over US$ 29 million were distributed through CBI last year, 80 per cent as emergency response. The food sector was by far the sector with the most beneficiaries: 80 per cent of those who benefited from CBI received cash or vouchers to improve their food security. CBI targeted those in large towns, for example Bangui and Kaga-Bandoro, where nearly 400,000 people were assisted with cash, for reasons of availability of products and financial institutions.
Preferred modality in times of pandemic
With a 48 per cent increase in the number of beneficiaries reached in 2020 compared to the previous year, CBI has experienced a surge; a trend which is certainly not unrelated to the onset of COVID-19. About 40 per cent of CBI in 2020 aimed at containing the pandemic. Small-scale grants allowed families to purchase soap, jerrycans and masks to improve their hygiene and prevent propagation. CBI further strengthened the capacity of health workers and facilities to test and treat patients. Cash transfers became more important than ever during the pandemic as they avoid large crowds. In line with the Humanitarian Response Plan 2021, humanitarian actors are committed to continue scaling up CBI in 2021.