Cash-based programming is becoming increasingly widespread in the aid sector and is currently one of the preferred solutions aid agencies resort to especially in crisis situations where fast response to people’s needs saves lives. Where appropriate, cash-based programming effectively improved people’s ability to purchase sufficient nutritious food and meet other basic needs. It removed the procurement, transportation and storage costs for aid agencies. It boosted the local economy. It provided a wider choice and variety of food and other items for beneficiaries. It restored dignity and control over one’s life for beneficiaries. Finally, it can be easily integrated in broader social protection and safety net systems and in those countries where there are none, it can help create them, thus contribute to strong country systems, independent of external aid.
However, cash-based programming is not appropriate in every context. It requires well-functioning and accessible markets and performs best where the local economy and currency are stable. It also requires administrative capacity on the part of the delivering agency and an analysis of beneficiary preference. Finally, it needs attention as to the risks of diversion and security for staff and beneficiaries which are higher than those involving in kind assistance. In some cases, cash-based programming needs to be combined with in kind assistance.
We conduct in-depth analyses to determine the most effective solution in each specific situation and ensure delivery of state of the art cash and/or in-kind assistance. This includes surveys of local market conditions, financial service providers, technological options and infrastructure availability, among others. It also includes making sure that implementers are capable of adopting the solution, closely and continuously monitoring its impact and switching to a new one if required.