cashbased

Cashbased refers to programs or policies that provide money or monetary equivalents directly to individuals or households to meet their needs, rather than delivering goods or services (in-kind). Cash-based interventions include unconditional cash transfers, conditional cash transfers, and vouchers that function as cash. They are used in humanitarian aid, development, and social protection to increase purchasing power and resilience.

Types include unconditional cash transfers (UCTs) with no conditions; conditional cash transfers (CCTs) tied to behaviors or service use; cash-plus approaches that combine cash with additional services; and vouchers that restrict purchases to specific goods or vendors and can be delivered as cash or electronic vouchers. Delivery can be through bank transfers, mobile money, or prepaid cards.

Effectiveness evidence is mixed but generally favorable. Cash-based approaches can increase household consumption, improve food security, and reduce distress, with effects comparable to or greater than in-kind aid and often lower administrative costs. They can support local markets and recipient choice. Outcomes depend on market functioning, price levels, governance, and the ability of recipients to access financial services; in inflationary or market-disrupted contexts, cash may not fully meet needs.

Risks and challenges include targeting errors, leakage, fraud, security concerns for recipients, exclusion of unbanked populations, digital access barriers, fees, and potential inflation in tight markets. Successful implementation requires robust payment infrastructure, appropriate transfer values and frequency, data privacy protections, risk management, and grievance mechanisms. Coordination with financial institutions and compliance with regulatory and anti-money-laundering requirements are also important.