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What are the necessary conditions for Cash Transfer Programming to be appropriate to deliver my project?

by Key Aid Consulting | 2017-09-11 02:13:52 -0500

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by Key Aid Consulting | 2017-09-29 04:12:23 -0500

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Determining the appropriateness of using cash transfer programs (CTP) should ideally be done at preparedness stage to feed into contingency planning and inform future responses. To determine if CTP is appropriate for a specific project, ensure the following:

Community acceptance and needs

a. The targeted community is used to handling cash.

b. The beneficiaries’ needs the project is intended to cover are usually covered through the market(s) (as opposed to household production for example).

c. Crisis affected people prefer cash over in-kind. While this is often the case, it cannot be assumed and thus needs to be assessed. The preference for a certain modality can be influenced by the perceived value of the assistance, market volatility and bias towards the type of aid people are used to receiving.

Political acceptance

a. The government (national, regional, and/or local as relevant to your project) is aware of what CTP is, and is accepting of the use of cash transfers.

b. There are no legal restrictions on the use of CTP or certain delivery mechanisms (e.g. mobile money) in the area where you plan on implementing your project.

Markets functionality

a. Markets are integrated and able to accommodate the increase in demand (both in terms of quantity and quality of goods and services) the use of CTP will create.

b. The items (food, goods, or otherwise) beneficiaries need to meet their immediate needs are locally available.

c. Markets are physically accessible, safe and do not require significant resources (time or otherwise) to access. This should be true for all of the various factions of the target group (e.g. women, elderly, disabled, minorities, etc.).

d. Prices for key items and services are stable and in line with normal seasonal trends; the assessment does not indicate that prices are on an inflationary trend, and there are no foreseen price increases over the coming months (due to either the project or external factors).

Delivery mechanisms

a. Functional and reliable payment systems are available in the location where you will implement your project. This is one of the key conditions of CTP appropriateness. Financial service providers often refer to traditional financial institutions such as banks, microfinance institutions (MFI), and/or post offices, as well as more informal payment service providers such as traders, hawala, and local organisations.

b. The payment agents or mechanisms are accessible to all targeted beneficiaries. This includes financial access (i.e. the costs to physically access the payment agent), physical access (ability and time to access the agent), and social access (i.e. men, women, elderly, people living with disabilities, children-headed households can access the payment agent).

c. If using mobile phones, the network coverage exists and is reliable.

d. Community members have the documents they need to access the payment system; they meet the Know Your Customer regulations (e.g. identification documentation, etc.).

Operational conditions

a. Cash transfers can be delivered safely and effectively. This includes considering the safety of the beneficiaries, but also the project implementation staff during the transport and distribution phases.

b. Protection related risks and vulnerabilities will not be amplified for the target population by the provision of cash assistance. Risks can be: contextual (i.e. external to the organisation: political, economic, environmental), programmatic (i.e. failure to meet programme objectives and/or potential harm caused), or internal (i.e. internal to the organisation). Risks of CTP should be assessed in comparison with those of in-kind aid and with those of not providing assistance at all.

c. Implementing organisations have, or can quickly build, the programmatic expertise and operational capacities required to implement a cash transfer programme. This includes the appropriate knowledge and skillset to target, screen, verify and register beneficiaries, conduct the cash distribution, process complaints and feedback, and monitor the project. The organisation also has the capacity and is prepared to train any implementing partners or contracted financial services providers as needed.

Value for Money

a. CTP is more efficient in achieving the outcomes than other modalities. Cost-efficiency is determined by looking at the comparable cost of delivery between cash versus in-kind or vouchers, measuring outputs against inputs in monetary terms. Factors that can affect cost-efficiency include the transfer costs and size, inflation costs/seasonality, market integration, support/operational costs, and costs to beneficiaries.

b. CTP is more cost-effective in achieving outcomes than other modalities. Cost-effectiveness depends on the cost efficiency, but also on the multiplier effects on the local economy, the beneficiaries’ preference, increased dignity and financial inclusion, women’s well-being and the objectives of the project.

The absence of one of the above-mentioned criteria will not necessarily rule out the use of CTP, but sufficient resources should then be planned for in order to overcome this challenge.

For more information: use your own organisation CTP Guidelines or those of:




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Asked: 2017-09-11 02:13:52 -0500

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Last updated: Sep 29