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Conditional Cash Transfers

What are conditional cash transfers and when are they used in a humanitarian response? The Cash 101 explains the pros and cons and examples of conditional cash.

21 February 2024

What is a Conditional Cash Transfer?

Humanitarian conditional cash transfers are payments given to people affected by crises on the condition that they carry out a specific activity or achieve agreed outputs. This might include attending a health clinic or constructing an emergency shelter.

They differ from unconditional cash transfers, which do not have requirements attached to receiving payments. Unlike vouchers or in-kind aid, all types of cash transfers do not restrict how people can use the money they receive.

Cash payments can be delivered in the form of physical cash, mobile money or pre-paid cards.

Infographic explaining conditional cash. Title: What is conditional cash? Below the title is an illustration of a hand receiving a banknote with a condition symbol. Main text: In the context of humanitarian cash and voucher assistance, ‘conditional cash’ means that people only receive payments if they carry out a specific activity. A speech bubble highlights that conditional cash can encourage specific long-term outcomes, or help kickstart recovery after a disaster, accompanied by an icon of a person gesturing approval. A graph icon indicates that in South Sudan, a project increased the number of girls enrolled in primary school by 173% by giving cash transfers to those who regularly attended school. A crossed-out condition symbol notes that conditions can be a barrier to receiving aid and that conditional cash can be more expensive and administration-heavy than unconditional cash transfers. At the bottom, there's a call to action: To find out more, visit calp.net/cash101.

What is the difference between Conditional and Unconditional Cash Transfers?

Humanitarian cash and voucher assistance can be conditional or unconditional.

With conditional cash transfers, a recipient must carry out a specific activity or obligation, whereas with unconditional cash transfers they are not required to do anything to receive cash.

The most appropriate type of cash transfer for a specific response will depend on several factors. Considerations include:

  • The vulnerability and needs of potential recipients, as there might be barriers for some recipients to meet conditions.
  • The goals of the programme, such as changing behaviour around nutrition or encouraging school attendance.
  • Operational capacity of the implementing organisation as more administration is often involved in conditional cash transfers.
  • Cost-effectiveness. Conditional cash transfers cost more on administration, monitoring and enforcement than unconditional programmes.

What are the pros and cons of conditional cash transfers?

Pros:

  • Conditional cash programmes, such as cash for work, can kick-start essential recovery work on infrastructure, such as clearing roads or building water barriers.
  • Longer-term outcomes, such as women’s empowerment, can be encouraged. When conditional cash was paired with attendance of women’s empowerment groups it can lead to longer-lasting change. That said, many studies found that when programmes delivering cash transfers end, some of the benefits also end.
  • Conditional cash transfers have been used to effectively encourage school enrolments for girls, removing barriers that had previously prevented them from accessing education.
  • Some studies have shown conditionality programmes such as cash for work can increase assets and wealth.

Cons:

  • Conditional cash transfers can place an undue burden on women in the form of extra-official requirements, such as travelling long distances to collect payments, requiring hospital births and the use of state-run day care services.
  • In humanitarian contexts, it has been suggested that the use of strong messaging could be a better way of positively influencing gender outcomes than imposing conditions. Conditionality may not make sense in emergencies where the situation on the ground is changing rapidly.
  • Conditional cash transfers incur more costs for administration, monitoring and enforcement than unconditional programmes.
  • Conditional cash transfer programmes are less common as a type of humanitarian assistance than unconditional cash transfers, as there are concerns around introducing barriers when people’s emergency basic needs aren’t being met.

What are examples of conditional cash transfers?

Examples of humanitarian conditional cash transfer programmes:

  • Cash for work payments are provided on the condition that designated work is carried out, such as rebuilding water barriers or roads in a conflict.
  • Cash for training, such as carpentry skills to support people to regain livelihoods following a typhoon.
  • Monthly cash transfers for attending a nutrition training and treatment for children’s malnutrition in a protracted conflict.
  • Bi-monthly cash payments for refugees on the condition children attend school.

Cash for work programme in Yemen

This SIDA funded, Islamic Relief programme provides paid-work opportunities to approximately 2,000 of the most vulnerable households in two regions in Yemen for six months. The goals were to provide money for the most vulnerable people to meet their basic needs, while providing a secure and continuous income to strengthen community resilience and rebuild community water and sanitation infrastructure.

All respondents to a survey about the project said the activities benefited them and their communities, and 85% thought the interventions increased their income.

To find out more, visit other Types of CVA pages, or take CALP’s CVA Fundamentals course.