Direct cash transfers in humanitarian aid can have real dividends by allowing individuals to address pressing needs and secure basic goods and necessities.
Cash payments from Give Directly have had a transformative impact in rural Kenya, reducing dependence on loans and benefiting local economies through a multiplier effect.
Deep dives
The Rise of Cash in Humanitarian Aid
Cash is becoming an increasingly important part of humanitarian aid as advocates argue that direct cash transfers can have real dividends. Providing cash allows individuals to address their pressing needs and secure basic goods and necessities. Cash transfers have a positive multiplier effect on local economies, contributing to their recovery. Even UNHCR, the UN's refugee agency, has adopted a cash-first policy, distributing money through the Egyptian Post Office Network to help Sudanese refugees. Give Directly, a charity built entirely around cash transfers, connects individual donors with recipients in extreme poverty, allowing them to make investments in their own communities.
The Impact of Cash Assistance in Kenya
Cash payments from Give Directly have had a transformative impact on recipients in rural Kenya. Individuals have used the money to invest in businesses, reducing dependence on expensive loans. They've been able to prioritize their needs, whether it's repairing their house, buying stock for their business, or paying for essential healthcare. The injection of cash into local economies creates a multiplier effect, benefiting other businesses and the community as a whole. Give Directly aims to give recipients a substantial amount, around $1,000, which research suggests can make a significant difference in lifting them out of extreme poverty.
Fraud Risks and Accountability
While there have been concerns about fraud risks in cash assistance, there is no evidence to suggest that cash transfers are more vulnerable to fraud than other forms of aid. Both cash and in-kind assistance have their own fraud risks, but it's crucial to assess and address those risks through proper measures. Agencies implementing cash transfers employ sophisticated methodologies for distribution, such as mobile money and voucher schemes, along with comprehensive controls and auditing processes. Fraud is a risk in any industry, and it's crucial to have proportionate measures to prevent, detect, and respond to fraud in humanitarian aid programs.
In the past, humanitarian aid has focused on providing shelter and food, but there’s a growing move towards direct cash payments.
We'll take you to Syria, Egypt and Kenya to find out how it works and why it's being embraced.
We speak to Rory Stewart, president of the US charity Give Directly, which is based entirely on direct cash payments. And hear from two women who’ve
used some of that money to develop their own small businesses in Kenya.
Elias Abu Ata explains how the International Rescue Committee used cash in the wake of the earthquake in Syria earlier this year, and Rasha Batarseh, UNHCR cash programme officer for Egypt tells us how it’s being used to help refugees fleeing the conflict in Sudan.
Finally, is cash assistance more vulnerable to fraud? Oliver May, former head of counter fraud at Oxfam, gives his view.
Producer/presenter James Graham
Additional production support from Chrystal Onkeo
(Image: Rory Stewart from Give Directly visiting a project in Malawi. Credit: Give Directly.)
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