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Cash 101: Cash and Voucher Assistance Explained

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Case Study

Cash and Voucher Assistance (CVA) Feasibility and Risk Analysis Sudan

June 2021 — By Naim Karsli

Summary findings

  • UN agencies and NGOs are all in the process of starting up or scaling up cash transfers with many other agencies active in the Cash Working Group while WFP is considered as the biggest Cash actor.
  • There is a strong direction from the government at the national level to use cash based intervention, preparation is ongoing to launch a massive national universal basic income (SFSP) – family support programme to replace basic commodities subsidy with cash assistance.
  • SC Sudan targeted 2,000 vulnerable families with cash assistance for 4 rounds in North Kordofan and North Darfur on Sep 2020. Save the Children was responding to the effects of the Covid-19 pandemic and the project aimed to reducing the impact of economic shocks on vulnerable families, especially on child nutrition, through monthly cash transfers.
  • SC Sudan is currently implementing BMZ Project which contains a large cash transfer element. In addition, there are couple of approved projects (e.g. Sudan Family Support Programme (SFSP), BHA & ECHO) or in the proposal stage.
  • In both central and north Darfur, communities are not familiar with cash assistance and they are more comfortable with in-kind as a modality. Interviewed community members shared other concerns about cash distribution related to the purchasing power, intra-household conflict and security risks.
  • IDPs concerned that cash distribution could trigger an intra-household conflict.
  • There is no issue reported about accessing the market or available of food items in both central and north Darfur. However, interviewed communities confirmed that the situation is different during rainy season between Jul – Sep. During the rainy season there is shortages in the supplies and an increase in prices.
  • Security still is an issue for central Darfur and interviewed communities there insisted on receiving the cash at the centre of their settlements and they were concerns about traveling and receiving it out.
  • All visited markets, observed and confirmed by the trader that markets are functioning well despite macroeconomic crisis; ever increasing prices, fuel shortage, increased cost of business, depletion of capital and generally reduced purchasing power.
  • There are very limited financial services (Mainly banks) in the main big towns (e.g. Zalingie and Al Fasher). However, available bank branches has very limited capacity and they are facing liquidity challenges. There is no present for any financial services in targeted communities except some unregistered traders that run other business.

Go/no-go recommendation

Cash is broadly feasible and increasingly used by government, UN and NGO actors to meet a range of needs, and there are FSPs available and willing to deliver cash to recipients. In the coming years, it is highly likely that more assistance will switch to cash in Sudan, and that the financial sector will adapt and develop to respond to demand from the humanitarian and development sector. However, considering the macro economic crisis and inflation, rainy season effects, market conditions, community’s concerns and limited cash delivery mechanisms, it is recommended to use a mixed modality approach between direct cash distribution through a financial service provider and commodity voucher using contracted food vendors to mitigate the risks and shift between the two modalities as a contingency plan.

Launching and scaling up cash interventions in the Red Sea state could be easier comparing to Darfur state, considering that the Red Sea state has a better infrastructure, network coverage, market functionality and FSP capacity. However, a rapid large scale intervention is expected to overstretch the capacity of contracted FSP, markets and staff. It is recommended to start implementation on a small scale and scale up gradually with close monitoring and strong community engagement.


Cash 101: Cash and Voucher Assistance Explained

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