SDC and Cash

SDC and Cash

Why should SDC engage in Cash Transfer Programming (CTP)?

As one of the first donors, SDC/HA (Humanitarian Aid) recognized the advantages of CTP over in-kind assistance in emergency response. CTP is usually considered the more dignified assistance modality as it allows recipients to address their needs according to their own preferences and choice. CTP is in most cases more cost efficient than in-kind assistance and results at outcome level have been encouraging in all sectors of intervention (food security, livelihood, resilience, health, education, etc.). Lastly, CTP can help to revitalize the local economy and trade in crises affected areas. At the same time, SDC/HA recognizes that CTP is not always a suitable response option and that a whole range of factors need to be considered before engaging in cash transfer activities, including the functioning of markets and availability of required goods and services in the market, cost efficiency and effectiveness considerations, beneficiary preference, and acceptability by local authorities.

The use of CTP in emergency response has been increasing significantly over the past years, and a number of humanitarian trends (e.g. increasing urbanization and urban disasters, more protracted conflicts, donor pressure for efficiency and value for money, social safety nets in emergency response) will further boost the use of CTP in the future. Thus, it is crucial that the SDC/HA continues its engagement on CTP and further builds its competencies in delivering CTP and providing operational and financial support to its partners.

Cash transfers and the SDC – looking back

The SDC/HA started to use cash transfers in response to the humanitarian crises in Kosovo in 1999 and was one of the first actors implementing cash projects in humanitarian response. First Cash Projects in the shelter sector were implemented first in Albania and Kosovo and later in Serbia and Macedonia. Despite early criticism that cash was prone to corruption and more likely to be misused, SDC/HA based on its positive cash experiences has been a strong advocate for the use of cash in emergency response, rehabilitation and recovery.

From 2000 to 2015, experts from the SHA Unit implemented 28 CTP direct actions with a total budget of more than CHF 60 million in various countries. The majority of direct actions aimed at providing protective shelter to the beneficiaries through self-help shelter rehabilitation and support to host families, which is why SDC/HA is considered a pioneer in utilizing the cash-based approach in shelter assistance. Other CTP direct actions aimed at strengthening or restoring livelihoods, such as cash for livelihood projects in Sri Lanka, Bangladesh or Mongolia and vouchers for seed in Zimbabwe.

Since 2009, the SDC/HA has supported the UN system through secondments of cash experts from the SHA (Swiss Humanitarian Aid Unit) roster. The aim of these secondments is to assist UN agencies and programmes in institutionalizing CTP and improving CTP programme quality. To date, Swiss experts have been deployed on 35 cash missions mainly with the World Food Programme (WFP) but also with the UN High Commissioner for Refugees (UNHCR) and the UN Relief and Works Agency for Palestine Refugees (UNRWA).