Cash assistance: restoring choice and dignity

From 2019 until 2022 at The Netherlands Red Cross my team and I have been developing the 121 Platform: a digital platform to make cash-based humanitarian aid programs easier, safer and faster.

This post is a cross-post of the article “Cash assistance: restoring choice and dignity” written by Dirk Segaar, Director of International Assistance at The Netherlands Red Cross, which appeared on LinkedIn on 17 June 2022. See the second to last paragraph for the reference to the 121 Platform.

The conflict in Ukraine has lasted over a hundred days now and the situation remains extremely dangerous in many parts of the country. These uncertain circumstances make it challenging to provide humanitarian assistance. However, there are ways of providing assistance that can work particularly well due to the fact that they are more flexible and do not dependend on the delivery of supplies to hard to reach areas: cash assistance. In short, cash assistance entails the provision of financial means to people affected by conflict or disasters in the form of vouchers or existing payment systems like mobile money, credit cards, money agents or bank transfers. This type of assistance restores a degree of choice and dignity to people as they can decide what they need most at any given moment, rather than having to rely on the hand-outs of generic emergency assistance items. In Ukraine and neighbouring countries, like Poland and Slovakia, over 4.8 million CHF (nearly 4.6 million euro) has been provided through cash assistance to over 61,000 affected people. In the coming weeks, cash programs will also be rolled out in Romania, Moldavia and Hungary. That way, people who are forced to flee, or who reside in areas with heavy fighting, can determine what they need most under these difficult circumstances.

The cash assistance program in Eastern Europe is one of the largest financial programs currently implemented by the Red Cross. To this end, the International Red Cross (IFRC) has ambitious plans: they are committed to delivering 50% or their humanitarian assistance globally through cash and vouchers by 2025. In recent years the provision of cash assistance has rapidly increased within the humanitarian field. In 2016, ‘only’ 2.8 billion US dollar (constituting 10.6 percent of total international humanitarian aid) was programmed in cash and voucher assistance, whereas in 2019 this amount doubled to 5.6 billion dollar (or 17.9 percent of international humanitarian aid). It thus becomes an increasingly important response tool for humanitarian organisations.

There are many advantages to this form of humanitarian assistance. Firstly, receiving cash gives people more choice to direct their own recovery and prioritize their needs (for example rent, food, phone cards, education or medical care). This empowers people and increases their resilience as they are less dependent on the way aid organisations fulfill their mandates. Additionally, this form of assistance is very easy to scale up or down. Other advantages are the speed, applicability in hard to reach areas and its contribution to the local economy as the vouchers or cash will be spent locally (rather than supplies being flown in from abroad). In general, this form of aid is safer and more flexible in its use – and also much more dignified, avoiding for example that affected people have to wait in line for hours to receive aid.

No alt text provided for this image

There are also challenges and barriers that limit the effectivity of cash assistance. As it is a multipurpose use, it does not seamlessly fit into a sector-based humanitarian system (with sectors like shelter, food, WASH). The results are more difficult to measure as people have the freedom to spend the cash or vouchers on anything they need. The recipients of the assistance are in the driver’s seat, which is positive, but it is challenging for aid workers to determine the results and impact. More research is therefore needed.

The Netherlands Red Cross contributes worldwide to the implementation and development of cash and voucher assistance; there is extensive cooperation with other Red Cross societies. For example, in Ethiopia the Netherlands Red Cross supports families who are impacted by the effects of conflict and drought through several cash programs. Some 26,000 vulnerable people who have been forced to flee, were injured or lost their livelihoods, benefit from these programmes. The challenge in Ethiopia is that in certain regions, people live semi-nomadic lives and are therefore more difficult to reach as they do not have a fixed place of residence or live far away from a bank. In Amhara, the violence erupted suddenly, people lost their IDs and as a result could not open or access their bank accounts.

On a regular basis, international experts come together to develop and enhance cash assistance. The data and digital initiative of the Netherlands Red Cross, 510, plays a key role herein. Specialized delegates from 510 are being deployed to areas where aid is needed, to support with digital systems, information management and data analysis. For example, during the COVID pandemic a large cash programme was launched on the Caribbean islands Aruba, Curacao and St. Maarten, where vouchers worth 46.8 million euro were distributed to people who lost their income as a result of the lockdowns or travel restrictions. 510 undertook an assessment to determine how fast and on which scale a cash program could be rolled out and consequently assisted with the implementation. In no time a voucher system was set up as it turned out that this system would be less dependent on the formal financial infrastructure, because banks would close during the pandemic. Due to the nature of the crisis – a virus pandemic where people were not supposed to be in direct contact with one another – and the possibilities of scaling up, a voucher system was the best fit to effectively help people in need. A success story.

No alt text provided for this image

Another impressive example of cash assistance is the 121 platform, a digital portal developed by 510 that offers software products aiming to make the provision of cash assistance faster, safer and easier for both affected people and aid workers. It is an open source product that has been designed in collaboration with cash recipients, including different apps for registration, validation, monitoring and managing cash and voucher assistance. Data protection, accessibility and accountability are central to this portal.

Currently, in the Ukraine and neighboring countries we are working around the clock to provide financial support to 360,000 people. 510 supports these activities with information management, digital registration of beneficiaries, data analyses, improving processes and digital communication with recipients of aid. In addition, there is a long-term plan for cash interventions – for 24 months – in order for a transition to recovery. Within the Red Cross Movement and in close cooperation with local and international partners we work towards a more integrated cash system. So that people in need are being assisted the best way possible; restoring a degree of choice and dignity when they need it most.