In humanitarian aid programs, agencies often provide cash, vouchers, or in-kind relief to individuals in need (such as food, clothes, shelter, and other household items.). But recently at the time of crisis, the use of cash or vouchers are increasingly being considered rather than the in-kind aid by the humanitarian agencies.
Cash transfers are predetermined cash donations given either as a lump sum or in periodic transfers. Conversely, in-kind transfers are direct transfers of physical goods distributed to households. With the rapid changing scenario in digital technology, Cash and Vouchers (CVA) are becoming more popular in the humanitarian sector. “Cash and Voucher Assistance (CVA) refers to all programmes where cash transfers or vouchers for goods or services are directly provided to recipients.” - Cash Learning Partnership. It addresses the needs of the people at the time of crisis by empowering them and assures that people have the freedom, dignity, and autonomy to choose their own path to rehabilitation.
CVA promotes the local economies and fosters social cohesion among communities and social groups which ultimately stimulates local currency (money spent in the country stays in that country) and along with that the beneficiaries don’t have to wait in the long queue to receive their relief aid.
CVA and in-kind relief distribution effort
Many countries have initiated enormous CVA and in-kind relief efforts in response to the COVID-19 pandemic's economic and social consequences. The global pandemic has brought CVA programming to the forefront. As a humanitarian response many NGOs, INGOs, and other various humanitarian organisations expanded the use of the cash and voucher assistance all around the world. It helped them meet the basic needs of diverse communities through electronic cash transfers and voucher systems allowing the people to receive financial assistance while remaining in their current location, spending money when and where it is most needed on the things and services that they require. All of these CVA initiatives empowered individuals to not only meet their basic needs but also stimulated local economies during a time of unprecedented uncertainty.
Food rations, clothing, household products are some of the in-kind relief provided by the aid agencies. In an emergency situation, relief packages or items may not always be sufficient to meet the needs of each particular household. The relief packages and products must be transported, stored, and distributed, which requires both resources and time. People are the one who are best placed to determine what they and their families require most urgently. In the humanitarian sector, cash transfers are becoming increasingly popular. They allow families to make their own purchasing decisions, allowing them to reclaim dignity and control over their life.
Benefits of CVA
People who are in need of assistance will have more choice and flexibility since they will be able to acquire the things they require from a local store near their home and at a convenient time if they receive direct cash as a relief aid.
When people receive cash as a form of assistance, they are more likely to spend it on the goods and services that they require at the moment. They'll have more financial control and cash security. Cash transfers have shown to be an effective technique to educate individuals about financial control and security through many humanitarian efforts conducted throughout the world.
Providing cash as a form of relief can improve people's ability to save, especially for emergencies. The money that they receive can be used to purchase goods that they require most urgently and if possible; other amounts can be preserved for future emergencies.
Cash transfer initiatives increase the effectiveness of humanitarian efforts by reducing costs and also by eliminating the need for product shipping, storage, or distribution from one location to another.
Today, a growing number of humanitarian organisations are relying on the Cash and Voucher program to operate smoothly. Different projects are being conducted all around the world by different national and international organisations such as UNICEF, WFP, World Vision and so on to test the use, importance and impact of CVA in the humanitarian sector for regenerating the life of underprivileged communities.
Impact of CVA for regenerating life of underprivileged communities
There are many projects focusing on the CVA initiatives and among them on june 2019, UN Women have collaborated with the World Food Programme (WFP) to investigate the use of blockchain technology to transmit payments to women participating in Oases cash-for-work programs under the name Building Blocks pilots in Za'atari and Azraq refugee camps.
Aisha Salam, 36, moved to Za'atari refugee camp from Damascus in 2014 and had to figure out how to sustain herself and her three children. She became a teaching assistant and childcare provider at the Oasis Centre, which enabled her to pay for her daughter's medication and meet the family's necessities. Salam stated, “Being able to save money for my daughter’s medication is very important to me, for myself and I know for many other women, it is reassuring to know that no one else can take the money or take advantage of our salaries.”
World Vision (WV) is yet another humanitarian aid, development, and advocacy organization that is focusing on expanding its use of Cash and Voucher Programming (CVP) to help individuals in need across Asia Pacific. As a result, In 2020, WV collaborated with primarily Asia Pacific countries such as Bangladesh, India, Nepal, and Laos and conducted a study focusing on CVP achievements and challenges with the primary goal of determining the scope of efficiency, relevance, and coherence of cash and voucher programming in all this region.
WV tried to make the most of cash and vouchers as much as possible throughout the pandemic response so that families could choose which sectoral needs they wanted to address. In addition to meeting urgent needs, WV used cash and voucher programming to aid in the early recovery of vulnerable families identified through their participation in government social assistance programs.
“I received 330,000 ($35 USD) kip and used that money to buy rice and dry food, and divide some portion for garment and textile materials to make clothes in order to earn more money.”- Lamphan, 21, Laos
“Today, I am grateful to World Vision. I will repay my house rent with the money (USD 63) I received. Also, I hope that until I can’t start working, I can buy food for my children and they will not go to bed hungry. I thought I had no hope. Now, I can't say that I had no one's help.”- A single mother of three,Laboni, 26, Bangladesh
Impact of CVA through Rahat in Nepal
Rahat is one of Nepal's digital Cash and Voucher Assistance (CVA) management solutions for humanitarian agencies that employs mobile-based blockchain tokens for emergency response and recovery initiatives. It uses blockchain technology to transfer cash and commodities to beneficiaries via digital tokens. It allows for token distribution via mobile phones utilizing a One-Time-Password (OTP) that is confirmed by the merchant's mobile app over a blockchain network.
Image1: Vendor using Rahat app to confirm the shared OTP with the beneficiary
Rahat has conducted a number of pilot projects throughout the country partnering with the local communities by focusing on empowering the women and children of underprivileged communities by using its platform. Rahat is playing a vital role in the creation and implementation of a cash and voucher assistance (CVA) program to help affected families fulfil their immediate food needs in a dignified manner.Through its various pilot projects it is providing both cash and in-kind relief to the people in need. It hopes to plug leakages in aid distribution, involve local communities to build financial resilience, and tap into support for unbanked populations efficiently as it uses mobile-based blockchain tokens to manage and monitor the flow of aid transactions
“This is a very modern way of receiving Rahat (relief) which is very effective for us as we don’t have to wait in line for hours and the process is very clear and transparent.”- Rajesh Khadgi
Cash transfers have received a lot of attention in the recent decade as a result of many research and pilot projects conducted all over the world, since they have proven to be an effective and economical policy response to poverty reduction. The majority of the world's poorest people live in rural areas and are economically disadvantaged. Various development strategies in impoverished rural communities have failed to establish sustainable livelihoods. Instead of in-kind projects, the government, humanitarian relief organisations, national and international agencies, and policymakers have emphasised on embracing the numerous donors and locally funded cash transfer projects.