Increasing the Use of Humanitarian Cash and Voucher Assistance: Opportunities, Obstacles and Dilemmas – Global

Through in-depth analysis of the latest data and careful modeling, this study maps the current scale of CVA and unpacks the opportunities and challenges involved for it to reach its full potential.

December 4, 2022 — By Corinna Kreidler, Niklas Reiger

What’s in the report

The use of cash and voucher (CVA) aid has grown rapidly in recent years, almost doubling as a proportion of international humanitarian aid since 2016 and now representing around 19%. Yet it is clear that there is potential for a significant increase in the use of cash transfers.

The research revealed that:

If cash transfers were provided wherever possible and appropriate, they could account for at least 30% and up to 50% of global humanitarian assistance. The global use of cash transfers is estimated to have reached 30% of total reported humanitarian operations in 2021.

The challenges of scaling up CVA were examined with a focus on three countries – Yemen, Zimbabwe and the Philippines. The research revealed that the main challenges to pursuing CVA scale-up were varied and many, from the overall availability of funding to the extent of harmonization of CVA approaches to the availability of financial services. . There is no single untapped reservoir to unlock the potential of CVAs. The largest volume of aid with such restrictions is US Farm Bill “Title II” food aid and is often seen as the only significant impediment to increasing CCV. However, it was found that if the entire Title II budget had shifted to CTs, total global CT volumes in 2017 would have been 21% instead of 15% of total international humanitarian assistance. This is significant but still well below the potential estimated by GPPi (37-42%) and the figure of 30% calculated in this report. The increasing use of cash transfers puts pressure on the humanitarian system to change and, at the same time, the system requires changes to scale up cash transfers – there is clear pressure in both directions.

The rate of growth in CVA use is slowing, but we are nowhere near the levels that would be achieved if CVA were used everywhere and whenever it was appropriate. This study unpacks the potential – and the hurdles the humanitarian community must overcome – to fully realize cash transfers as an effective tool to respond more effectively to people’s preferences in crisis contexts.

Methodology

The research conducted interviews with 10 non-operational cash actors (donor agencies, global coordinating bodies and Cash Working Group coordinators) and 22 operational agencies. Predominantly, operational agencies were selected from the three sectors that form the bulk of CVA (food security/livelihoods, shelter/non-food items and WASH). However, it was deemed important to also include representatives from other sectors where cash transfers are not (yet) an important modality, such as health.

To develop an overall figure on potential CVA volume, data was combined from CALP and DI data collection and calculations, agencies shared and public quantitative targets for CVA. Indirect targets were determined for other organizations, based on assessments made by key informants. For organizations without any information on CVA targets, we have added the actual CVA volumes implemented in 2021.

Next steps

While this report examined the scaling potential of CVA, a sister report, Where next? The changing cash and voucher policy landscape has examined policy gaps and opportunities for improvement in this area. Together, the reports provide new insights into what is possible, the complex web of policies that influence the humanitarian system, and the barriers to change.

A third document Effective, People-Centred Aid: The Urgent Need to Accelerate Progress on Cash and Voucher Assistance for People in Crisis summarizes the essence of both reports and concludes that there is an urgent need to take a new political direction.

We encourage those whose work it is to support people in crisis to continue the dialogue about the future of CVA – and to establish and/or renew CVA commitments so that we do not miss this opportunity to make a difference for the people affected by the crisis. If you would like to stay up to date with any official development events, please sign up to receive emails from the CALP Network.