How Cash Assistance Empowers People and Markets

Mothers and their children shop at a fresh food market in the Bhashantek area of Dhaka city in Bangladesh, using money distributed through cash-based transfers. Photo credit: World Food Programme/Wahid Adnan.

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The World Food Programme uses cash transfers not just to feed the hungry but also to give people purchasing power to buy locally, helping to boost economies.


The coronavirus disease (COVID-19) pandemic shows that cash is king in times of crisis. Emergency response across the world has included cash assistance to the poor and to millions of households whose sources of income were disrupted by lockdowns and mobility restrictions. Both governments and donors turned to direct cash transfers, which were relatively quicker to deploy than distributing food and other basic goods.

Even before the pandemic, cash transfers had been used in relief efforts, as part of social protection programs, and even as a development tool. There is growing evidence that giving cash can be more cost-effective than in-kind support in certain situations, as it enables people to meet their most pressing needs according to their priorities with multiplier effects on the local economy.

The United Nations’ World Food Programme (WFP), winner of the Nobel Peace Prize for 2020, has been using and increasing cash-based transfers in both humanitarian and development settings where markets and the financial sector are working. In 2019, it transferred a record $2.1 billion to 28 million people in 64 countries, compared with just $10 million in 10 countries in 2009. This amount represents 38% of its total assistance portfolio in 2019—up from 1% in 2009.

This year, the COVID-19 crisis has pushed more people into hunger. WFP estimates that more than 49 million will become food insecure in Asia and the Pacific alone. So far in 2020, it has doubled its yearly average in the region, transferring $115.6 million to 2.1 million people in nine countries through e-vouchers, cash-in-hand, or direct deposit to bank accounts.

Why is the World Food Programme using cash-based transfers?

Cash transfers give purchasing power to vulnerable people who know best what they need to improve their families’ food security and wellbeing. Enabling them to buy locally also helps local retailers and producers and boosts local markets, thanks to the extra demand.

Cash transfers can also be a starting point to promote the financial inclusion of previously unbanked persons by giving them access to formal financial services and to digital payment services, supporting women’s economic empowerment.

Government-to-people (G2P) cash transfers are the bedrock of established safety net programs. Because of its cash-based transfer expertise, WFP is able to support governments and their efforts in using cash assistance for national social protection schemes.

What are examples of cash transfers in Asia and the Pacific?

WFP has provided direct cash transfers to vulnerable households in Nepal to help mitigate the economic impacts of floods, either through deposits to bank accounts or remittance agents.

In Bangladesh, it has distributed e-vouchers to Rohingya refugees living in the camps of Cox’s Bazar since 2017. It also supported small businesses owned by women living in host communities with conditional cash transfers. The women receive cash transfers after participating in business plan development and various training on running a small business.

Afghanistan is WFP’s second largest cash-based transfer portfolio in the region next to Bangladesh. This year’s cash and voucher program amounts to $40 million, reaching 7.2 million people. Cash operations assist displaced people, returnees, and those in need of seasonal support, social protection, and winterization. These also support asset building, vocational training, and school meals. Cash transfers are part of the COVID-19 response in urban areas, including Kabul.

Where possible, WFP is increasingly moving from directly providing cash assistance toward enabling governments to strengthen their cash delivery systems through their social protection programs. For example, in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) in the Philippines, it is supporting the regional government in digital beneficiary management and in transferring cash top-ups to 365,000 households severely affected by COVID-19 under the country’s Social Amelioration Program.

In Pakistan, it is supporting the Benazir Income Support Program through cash top-ups to 50,000 families affected by drought.

In Bangladesh, it is helping the government to increase social protection coverage in response to COVID-19 particularly in urban areas and in setting up a self-enrollment system for potential beneficiaries.

In Fiji, it is jointly implementing a cash transfer program with the government to assist populations affected by Tropical Cyclone Harold.

In Myanmar, it is helping expand national social protection flagship programs and digital cash transfers for humanitarian assistance. During the pandemic, it supported both the Department of Social Welfare and the Department of Disaster Management through technical advice on delivery platforms and the end-to-end management of cash transfers. It has also piloted digital cash transfers for displaced people in Rakhine in 2020, following successful e-cash deliveries in Kachin state since 2018.

What are the key challenges in implementation?

Effective targeting is among the top concerns—making sure that the assistance reaches the right people and achieves the intended outcomes. Often, there is a lack of quality data to determine the eligibility of households and individuals.

Implementation may also be constrained by the lack of institutional capacity and financial service providers to support the program.

How can cash transfers reach the right people?

The WFP program cycle follows end-to-end corporate assurance standards to ensure the right people are receiving the right value of cash assistance at the right time.

Designing the program starts with a household needs assessment to determine who and where are the people in need of support, and that looks at not just food consumption but also essential needs, such as health, shelter, winterization, medicine, and education needs. This helps gauge the probable expenditure basket of the household and what is the appropriate cash contribution.

WFP works closely with national and local authorities and UN and NGO partners on the ground to identify and verify vulnerable families and individuals to be targeted. Registration of target households and individuals may be based on the national identification system or a functional ID, such as a voter’s ID or a health card. If there is none, WFP issues a card, which may be used again for other programs. The list of people who will receive cash assistance is then made with payment instructions.

WFP also conducts a market assessment to find out if the necessary infrastructure (e.g., technology, connectivity) and capacities exist. For example, will beneficiaries be able to access e-vouchers or receive mobile payments? Are markets and financial service providers functioning? Do financial institutions have risk management in place? Are there existing partners that WFP can tap?

After the cash payment is delivered, data is reconciled based on reports to evaluate whether a program is working as envisioned. For example, who are the partners participating in the program, and why are others not?

Aside from monitoring and evaluation, the system also includes complaints and feedback mechanisms to help improve the program.

Why is WFP increasingly digitizing cash assistance?

Digitization offers greater effectiveness, accountability, and efficiency. Digital cash transfers leave a data trail, which improves accountability and transparency and makes it easier to detect and correct anomalies quickly.

With COVID-19 still a major public health threat, digital transfers are a sensible way to deliver cash payments given safety concerns.

What are the priorities for 2021?

WFP will focus on four critical areas:

  • Emergency preparedness and response,
  • Supporting governments,
  • Data assurance, and
  • Coordination and strategic partnerships.

WFP notes that there is increasing demand from governments for technical support on cash transfers because of the COVID-19 crisis. It not only sees an opportunity to include cash as part of emergency response but is also working to institutionalize nationally owned programs or scale up existing social protection systems and strengthen these against future shocks.

Data analytics to support targeting and auditing is an emerging area. The key challenge is how to do this safely with accountability while protecting data privacy. 

This article is based largely on a joint World Food Programme and Asian Development Bank webinar, Cash-Based Transfers: Empowering People, Markets, and Nations, on 28 October 2020.


World Food Programme. Cash transfers.

World Food Programme. 2020. Cash-Based Transfers in Asia and the Pacific. October.

Kenn Crossley
Global Coordinator, Cash Transfers, World Food Programme

Kenn Crossley is global coordinator of cash transfers at WFP. Previously, he served as deputy director of WFP’s Policy and Programme Division, leading on cash-based transfers, social protection and safety nets, climate risk management, and country capacity strengthening. He holds a master’s degree in Philosophy from the University of British Columbia.

Stanlake J.T.M. Samkange
Senior Director Strategic Partnerships Division, World Food Programme

Stanlake J.T.M. Samkange serves as the senior director for the Strategic Partnerships Division of WFP. Previously, he served as director of the Policy and Programme Division. He was educated at Harvard University (A.B.), Oxford University, and Stanford University Law School (J.D.).

Parvathy Ramaswami
Deputy Country Director for Programme and Operations in Afghanistan, World Food Programme

In her 24 years at the United Nations, Parvathy Ramaswami has worked in India, the Asia–Pacific region, and at the headquarters of the WFP, and has numerous experiences working in both emergency and development contexts. She joined the WFP Country Office in Afghanistan in 2019. She holds a masters’ degree in Organizational Performance Management from the School of Management, Cranfield University in England.

Marcus Prior
Deputy Country Director & Head of Programme in Myanmar, World Food Programme

Marcus Prior is deputy country director and head of programme for WFP in Myanmar, and has worked for the organization in Afghanistan, Thailand, Italy, Kenya and Senegal. He has been part of emergency response operations, such as Iraq in 2015, the Haiti Earthquake and Pakistan Floods in 2010, and the Sahel Food Crisis in 2005. Before joining WFP, he worked as a journalist for 10 years.

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