Why are we talking about Financial Assistance in the Humanitarian Sector?
With its links to other reforms in humanitarian assistance, such as the push for localisation, participatory approaches, social protection and market based support, cash is being increasingly regarded as a catalyst for positive transformation. It is mandatory to ensure this change is driven by what crisis-affected people need and prefer.
Giving money to people in a humanitarian crisis is often a lot smarter for everyone than providing food and other in-kind aid. The growing use of cash to meet humanitarian needs is challenging traditional sector and mandate based models, and bringing with it opportunities to work with new partners and tools.
What is particular about cash transfer responses is that aid organizations focus on transferring money directly to aid recipients who purchase what they need rather than receiving aid in-kind.
What do we need to know about Financial Assistance?
Humanitarian cash transfers offer new opportunities for reaching people in need but humanitarian organizations need to be more sophisticated in understanding markets, using financial systems, navigating regulations and protecting beneficiary data.
The challenge to better deliver cash assistance is that most humanitarian agencies are in new and somewhat unfamiliar territory.
Humanitarian organizations usually need to hire companies to deliver money, which means to share information about the beneficiaries that receive the money. Transferring information about recipients has raised concerns about privacy and data protection. But the good news is that payment companies usually have very well defined standards in place to protect sensitive information.
CaLP - the Cash Learning Program for better understanding and improving the Cash and Voucher Assistance
CaLP is the global partnership for Cash and Voucher Assistance in humanitarian assistance. They are a catalyst for accelerating change. They work with individual organisations to help them increase the scale and quality of Cash and Voucher Assistance. And they bring organisations together to address the most pressing collective issues for cash.
CaLP believes that when appropriately incorporated into humanitarian response planning, Cash and Voucher Assistance presents opportunities for effective and efficient programming to meet the needs of people and communities affected by crises.
CaLP and IARAN partner to shape the future of Financial Assistance
To effectively prepare for the future, we need to look at all types of financial assistance in humanitarian settings, including humanitarian cash and voucher assistance, remittances, social protection payments and peer-to-peer giving and lending.
The collaboration between CaLP and IARAN has the purpose to develop four scenarios for the financial assistance landscape in 2030 and understanding how future trends will provide opportunities to deliver better responses through new instruments and partnerships.
For the first stage of this work we sought feedback from a wide range of stakeholders on the factors which will influence
the future of humanitarian action in general, and financial assistance in particular.
More than 70 actors from the humanitarian sector and beyond shared their feedback on the factors and tools that were felt to be most influential in shaping the future of financial assistance. Based on a weighted analysis, we were able to rank these factors and tools by order of importance. The top five are illustrated below, and the full ranking can be found here.
These preliminary findings will be used to inform the second phase of research, where IARAN will envision future scenarios.
“The improved collaboration between government, pre-crisis private sector and civil society will change
the response to sudden onset events."
“Cashing-out will remain the norm as fears of cyber-fraud, identity theft and indebtedness increase."