Understanding and designing a cash transfer programme

1Why cash transfers?

Cash and voucher assistance (CVA) gives people the means to buy what they need on local markets. When well designed, it respects their dignity and choices, supports the local economy and is often cheaper to deliver than in-kind assistance.

It is not suitable everywhere: if markets are not functioning, if prices are soaring or if protection risks are too high, in-kind assistance or a combination of the two may be preferable.

2The modalities

• Unrestricted cash: can be used freely; often in the form of multipurpose cash assistance (MPCA), calculated to cover part of basic needs.
• Vouchers: redeemable with selected traders, as value vouchers (an amount) or commodity vouchers (specific items); they limit choice but make it possible to guarantee the quality or type of products.
• Conditional transfers: paid if an action is carried out (for example "cash for work" or rebuilding a shelter in stages).
• Restriction (what the money can be spent on) and conditionality (what must be done to receive it) are two different things.

3Market analysis and feasibility

Before choosing, check:

• Markets: are essential goods available, in sufficient quantity, at stable prices? Can traders restock if demand increases? Tools exist such as the RAM (rapid assessment for markets) or EMMA.
• Access: can people get to the market safely, including women, older persons and persons with disabilities?
• Delivery mechanisms: mobile money, prepaid cards, banks, payment agents, direct cash distribution.
• Risks: inflation, diversion, theft, tensions within households or with host communities, risks to personal data.
• People's preferences and acceptance by the authorities.

4Setting the transfer value

The value is based on the minimum expenditure basket (MEB): what a household needs to spend per month to cover its basic needs (food, rent, water, hygiene, transport…). It is often set with the country's cash working group so that all organisations use consistent amounts.

You calculate the gap between the MEB and what the household can already cover, then set an amount according to the objective and the budget. Example: an MEB of 250 dollars and a household that covers 100 dollars: a gap of 150 dollars; the programme may cover all or part of this gap. The value is reviewed if prices change significantly.