Introduction to Cash Based Interventions for M&E professionals

Understanding Cash Based Interventions (CBIs) and their role in M&E is crucial for anyone working in humanitarian aid, development, or related fields. It's a reflection of the changing landscape of assistance delivery and a response to the evolving needs and preferences of beneficiaries. In this article, we introduce the topic of Cash Based Interventions (CBIs), look at the most common types of Cash Based Interventions, where the opportunities and challenges lie and briefly look at Cash Based Interventions in monitoring and evaluation.

You can also watch the following webinars to get more information on CBIs and see some practical examples of information systems for CBIs:

This article is available in French and Spanish too!

Understanding Cash Based Interventions (CBIs)

A Cash Based Intervention refers to any action in which cash or vouchers redeemable for goods or services are distributed to refugees and other persons of concern (POC) either as individuals or as representatives of a community. The term CBI, ‘cash based transfer’ and ‘cash transfer programming’ can be used interchangeably. They can be used independently or in combination with one another or with in-kind assistance (goods or services).

The rationale behind CBI stems from the recognition that cash transfer serves as a broad mechanism for allocating resources across various sectors. For example, in a situation where essential goods are available on the market but the affected population lacks the financial means to acquire these goods, then providing cash allows people to cover their short to long term essential food and non-food needs. So essentially, CBIs allow for the improvement of human agency, the promotion of human rights and community based approaches to disaster reliefs and to ensure collaboration in humanitarian crises.

Most common types of Cash Based Interventions

  • Conditional cash transfer: This comes with specific spending requirements. So recipients need to fulfill certain conditions, like engaging in tasks of building their homes or providing labor to community projects. Another key component of conditional cash transfers is the qualifying condition, where the recipients receive the cash or vouchers after they have fulfilled the conditions.

  • The unconditional cash transfer: Unconditional means that there are no rules attached to how the money should be used. However, it is expected that the money will be used to cover basic needs if they were found in the assessment.

  • Commodity or cash vouchers: Commodity vouchers are a type of promissory note or token that can be exchanged for specific goods or commodities, rather than cash. Cash vouchers are similar to gift certificates or coupons but are usually used as a form of non cash payment. They represent a certain monetary value and can be exchanged for goods and services.

What do we need to think about when selecting transfer modalities?

Various mechanisms for cash and vouchers exist such as immediate cash, delivery to an agent, smart cards, mobile money or transfer via a bank account. Whatever the case, there are certain things that we need to keep in mind about transfer modalities:

  • Functioning markets: Is the market capable of supplying the required products to meet the displayed population needs? We need to think in terms of quality, quantity and scalability.
  • Community preference: Do affected individuals prefer cash or vouchers over in kind assistance?
  • Security concern: When giving people cash, take into consideration the risks of crime, preventions, exploitation, abuse and personal safety.
  • Financial infrastructure: Think about the methods and actors for cash distribution to beneficiaries. Which distribution methods are safe, inclusive, user friendly, valued by beneficiaries, and effective in supporting local economies?
  • Financial literacy: Do the community and merchants understand the available mechanism? Are they used to paying with cash for basic services? Here, training on delivery mechanisms and relevant financial subjects is recommended.
  • Government position: Are authorities okay with distributing cash to targeted populations?
  • Operational capacity: Assess your organization's readiness for CBI, including employees, organizational structure and office equipment and tools. Do experienced implementing partners in the area have capacity to cover program activities?

CBI opportunities and challenges

In the context of humanitarian aid, CBIs offer both opportunities and challenges. A perceived risk in camps is that providing CBI can create a ‘pull-factor’ and possibly extend the duration of a camp’s existence or over-populate the camp beyond its capacity. To mitigate this, extend CBI programming to displaced populations living outside of the camps, and also to vulnerable members of the host community.

Cash can accidentally break up communities and the sense of unity and discourage people from doing things that people do voluntarily, this could make people more dependent without helping them in the long run. To mitigate this, design CBI programs to include a significant element of community grants.

Cash can negate voluntary activities or create dependency and reliance without sustainability. To mitigate this, consider using vouchers to purchase work tools for communities that engage in shared projects, rather than distributing cash to individuals.

Lastly, we have the risk of diversion and fraud. Here, is a diagram of diversion risk analysis from a case study in Somalia, where you can see different stages of the cash implementation, and spot diversion or fraud happening.

Diversion risk analysis
Diversion risk analysis

Implementation modalities for Monitoring and Evaluation

The operations management cycle in Cash Based Interventions in monitoring and evaluation refers to the systematic process by which humanitarian organizations plan, implement, monitor, and evaluate cash assistance programs or interventions to provide financial support to beneficiaries in crisis-affected areas. This cycle helps ensure that Cash Based Interventions are effectively and efficiently delivered, monitored, and assessed to meet the needs of the affected populations. The cycle typically includes the following key stages:

  • Step 1: Engage with the stakeholders
  • Step 2: Assess needs and capacities and determine programme objectives
  • Step 3: Analyze the different response options and choose the best combination
  • Step 4: Plan, design and implement the response on responses that you get from beneficiaries
  • Step 5: Monitor, listen,evaluate and learn
  • Step 6: Begin preparedness actions

CBI outcomes and Monitoring and Evaluation

CBI outcomes and monitoring and evaluation go hand in hand.

  • Basic needs and livelihoods: M&E can ensure meeting basic needs and supporting livelihoods by assessing the impact of the cash transfer or tracking changes on livelihood, productivity capacity or by collecting feedback from beneficiaries to understand their perceived impact.
  • Speed and efficiency of cash: With the M&E system you can track the efficiency of cash by identifying the delays or bottlenecks, by monitoring timelines of cash disbursement, by analyzing cost effectiveness and efficiency metrics to optimize the resource allocation.
  • Comprehensive support: M&E can ensure that cash transfer programs are linked with other forms of assistance to provide comprehensive support by assessing the integration and coordination of cash transfer and other humanitarian services or related interventions.
  • Mitigating abuse and safeguarding: M&E plays a critical role in safeguarding beneficiaries and preventing monitoring mechanisms to detect irregularities or potential abuse in cash distribution.

In summary, Cash Based Interventions play a vital role in humanitarian and development operations by preserving the dignity of recipients, delivering swift and adaptable solutions. Examining common types of CBIs, the challenges and opportunities, ensures maximizing the positive impact of humanitarian interventions while minimizing potential risks and drawbacks.

Take a look at the article Monitoring and Evaluation for Cash Based Interventions for more information on building M&E systems for this case and at the article Building a monitoring system for Cash Based Interventions for more practical information based on a fictional case study and a database template that you can start using in the ActivityInfo platform.

Sources and further reading