New aid, new efficiency: Moving cash fast

Cash-based assistance is reshaping humanitarian aid. NGOs like the World Food Programme confirm this in Lebanon, where 700,000 refugees use an e-card to spend money in 500 shops all over the country. Quite apart from its efficiency and the boost it gives to local economies, cash also grants beneficiaries more dignity in uncertain times.

Half a dozen kilometers south of Beirut, the Lebanese capital, the dusty two-lane Beirut-Saida Highway cuts straight through Ouzai. This densely populated neighborhood has become little more than a forgotten ghetto, and Ouzai today is a backwater of poverty and overpopulation. Some say that there are more Syrian refugees than Lebanese people living on both sides of this highway – which you could also call a lifeline, bordered as it is by shops, garages, and gas stations; some smaller, some bigger, but all colorful, loud, hot, chaotic. In the lots behind the businesses, canopied by black cables stretching like spider webs from the tan walls lined with trash, families make their homes in poorly constructed houses.
Rabiaa Yassin is a 24-year-old mother of two who fled from Idlib, Syria almost four years ago. She opens the heavy iron door to her shelter and leads the way into a small, stuffy room of maybe 10 square meters, with another room beyond and then some kind of kitchen or bathroom beyond that. “It costs me US$200 per month,” says Rabiaa, “water and electricity not included.”

Cash becomes central to aid distribution

A card that changes aid and efficiency

Rabiaa’s Household Profile created by the World Food Programme (WFP) reads: "The family of three lives in one small independent room which is part of a common shelter holding around fifteen families in the al Ouzai area. There are two children aged four and six. The household representative is a 24-year-old mother; her husband is not enrolled on the UNHCR certificate. Both have no permanent job and are constantly searching for any temporary employment in order to gain additional income to supplement the humanitarian assistance they receive." Rabiaa takes out a numbered red card which represents the reality of what the NGO-speak documents. Just a card, but also a major step change in mindset, humanitarian aid and, yes, efficiency.
For years and years our collective awareness of global aid has been shaped by the same, almost iconic, images. Whether in Lebanon, Somalia, Haiti, or elsewhere, whenever there’s a crisis we see NGOs delivering boxes of food and distributing bottles of water to groups of thirsty, emaciated beneficiaries. But now we need to revise our collective awareness.

Martina Iannizzotto, WFP’s Head of Beirut, Mount Lebanon and South sub-office

Cash gives a substantial twin benefit that food aid doesn’t

During the early stages of Lebanon’s response to the Syria crisis, humanitarian agencies began the move from in-kind assistance to cash-based assistance (CBA), in order to more effectively meet the needs of refugees. “This change was facilitated by functioning markets, sufficient technical capacity, adequate banking services and sound infrastructure throughout the country,” explains Martina Iannizzotto, WFP’s Head of Beirut, Mount Lebanon and South sub-office. "We have a reputation for giving food, and for moving food fast. Here, we are moving cash fast,” she continues.

CBA is not only fast to arrive, but also cheaper to implement than bringing in food, which carries enormous logistical expense: there are costs to buy the food, move it, then the hundreds of WFP staff needed to put grain and oil into boxes and then give them to people. “It’s not efficient,” says the WFP spokesperson in Lebanon, Edward Johnson. “Not to forget that element of dignity: beneficiaries can buy what they want to eat and not what we are telling them to eat.”

The WFP e-card system has increased my earnings by around 25% since November 2016.

Aref Rayya, Shop owner, Ouzai

Cash offers an element of dignity and trust

The system, developed in conjunction with MasterCard and the local financial services provider, Banque Libano-Francaise, has supplied a card to nearly 180,000 households. And it should be noted that CBA doesn’t just provide hope to refugee families, but also gives a substantial boost to the Lebanese economy. “Where we deliver cash, all the evidence indicates that people are using it correctly. When it comes to our impact here, we are seeing that for every US$1 of cash assistance that we deliver in Lebanon, US$2.13 is generated for the Lebanese economy,” says Kevin Murphy, Cash Manager at the International Rescue Committee (IRC) in Lebanon.

Aref Rayya owns “Nour Market” in Ouzai, and his store became one of the WFP’s contracted shops in November 2016. Its monthly sales from WFP beneficiaries total between US$18,000 and US$21,000. “I added different brands to meet requests from Syrian refugees, particularly margarine, oils and cheese.” And what do his regular customers think? Aref insists that he has not lost any of his Lebanese customers, and is not anxious about the day the refugees – and therefore 25% of his income – leave the area. “It won’t affect me much, as the shop is in a good location. If they leave, others will come.”

Doing cash differently – and boosting the economy

WFP spokesman in Lebanon, Edward Johnson

What future plans are there for what we can call “aidficiency”? “To roll it out in other countries,” says WFP spokesperson Edward Johnson, “and start a trial with 140,000 people, that will move towards a system where users can withdraw cash from an ATM and do what they want with it.” He adds that the WFP is quite confident that the cash will be spent on food, as that is the biggest area of need that people face. “We are putting cash assistance at the forefront of what we do: we have an ambitious plan to increase the use of cash assistance to 25% by the year 2020,” says IRC’s Cash Manager Kevin Murphy.

The WFP needs to better understand the behaviour of beneficiaries and retailers, and minimize unintended practices.

Tobias Flämig, Head of the WFP’s Economic and Market Analysis Unit

Big data, more efficiency

With around US$18-22 million uploaded to e-cards every month, the WFP’s scheme in Lebanon is currently the agency’s largest cash-based transfer intervention – and a huge source for generating useful data.

  • There were 1,100,000 Syrian refugees registered by UNHCR in Lebanon by March 2016: The world’s largest concentration of refugees compared to population

  • Beneficiaries use the e-cards like a debit card in over 500 WFP-contracted shops around Lebanon. US$900 million has been directly injected into the Lebanese economy since 2013

  • By tracking digital footprints, humanitarian agencies can monitor a programme’s performance. This could improve programme accountability and efficiency, ensuring more resources reach those who need them most.

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