Stay tuned with CashEssentials news ! - beyond payments
By subscribing, you accept our Privacy Policy.

Cash Assistance for Refugees Boosts Trade

Categories : Cash is efficient
July 4, 2016
Tags : Africa, Humanitarian, Innovation, Liquidity, Money
Cash allocations help boost economic growth, trade and offer greater dietary flexibility to refugees compared to food allocations.
Communication Team / Equipo de Comunicación

A study conducted by the World Food Programme (WFP) in Rwanda has found that refugees that received cash allocations not only saw their incomes increase but also triggered local economic growth. For example, at the Kigeme camp where refugees were given only food, real income increased by US$1.20. In comparison, refugees that received cash allocations at the other two camps – Gihembe and Nyabiheke – saw each dollar’s worth grow to US$1.51 and US$1.91 in the local economy.

Professor of Agricultural and Resource Economics at UC Davis, J. Edward Taylor, says that “each refugee generates real income for the surrounding community that is larger than the sum of the humanitarian assistance the refugee receives – and if the refugee is receiving cash, the impact of that assistance can nearly double”

A refugee that receives monthly food supplies will have a tendency to sell part of the rations at below-market prices to have some cash for other goods. On the contrary, refugees that receive cash have greater control over their diet and see their purchasing power grow which, in turn, is a booster for the local economy.

However, the development of a cash vs food assistance programme largely depends on the surrounding conditions. Refugee camps that are located near agricultural areas will be more effective with a cash assistance programme. On the contrary, areas where food is scarce or markets aren’t accessible are better suited for food assistance systems. 

“These innovative cash-based transfers – which in different contexts can include physical cash, mobile money, SMS payments or food vouchers – enable WFP to respond faster to the needs of the people it serves.”

To read the World Food Programme’s full article, click here