Infographic 1: Cash and voucher system
Cash and voucher system refers to a restricted number of tools, where the cash or voucher is given to individuals, households or communities, but not to governments or other state actors.
In certain humanitarian disasters, the supply of food to markets and shops is sustained, yet, the affected population loses the means to buy it. In such cases, the cash and voucher aid approach ensures humanitarian aid reaches directly those with the greatest need in a timely manner.
Cash and vouchers are quick to deliver, cost-effective and provide people in need with greater choice. Among its advantages are benefits for local economies, empowerment of the beneficiaries, dignity and decision power to people who can choose the items they would like to buy. The cash and voucher system has shown to help the morale of those in need and also prepares the ground for linking relief, rehabilitation and development (LRRD) activities.
Cash and vouchers can be spent on a variety of products but usually food, non-food items, fuel, blankets and other essentials are the first port of call for those who need support.
With the institutional shift from food aid to food assistance, WFP now has three distinct transfer modalities for distributing resources to target beneficiaries:
Food in kind (in-kind contribution and/or procured).
Cash and vouchers, together with food, provide WFP with additional flexibility in responding to hunger and nutrition issues, and allow the organization to tailor a food assistance response to the needs of beneficiaries – including those with special needs – and their contexts (i.e. what is possible, acceptable and/or feasible in a given situation), facilitating their access to available food in the local markets
The diversification of transfer modality options requires: (i) a systematic analysis of markets to determine suitability of a market based response; and (ii) a better understanding of the context through a series of sectoral capacity assessments. These will identify what is possible and feasible in a given context, and what is acceptable for beneficiaries in order to ensure that the chosen transfer modality is the most appropriate option.
The transfer modality consit of:
Cash trasnfers – monetary assistance in the form of physical cash or electronic disbursement to a targeted individual or household that enables direct access to food from the marketplace,
Voucher transfers – assistance to a targeted individual or household in the form of a paper or electronic entitlement reedemable at preselected retailers or at specifically organised fairs for a predifined list of commodities, but not for cash,
Food in-kind transfers – assistance to a targeted individual or household in the form of dry or wet rations.
The two main types of vouchers are:
Commodity voucher – redeemable for fixed quantities of specified foods,
Value voucher – redeemable for a choice of specified food items with the equivalent cash value of the voucher.
Furthermore, there are two voucher distribution models:
Paper voucher – The beneficiary receives paper coupons and/or a scratch card that has a commodity or monetary value and that can be exchanged at contracted retailers or at specifically organized fairs. Both cash and commodity vouchers can be exchanged for items or services, but not for cash. Paper vouchers are distributed on a monthly basis and have a predefined validity period.
Electronic voucher – Electronic vouchers (e-vouchers) carry information on the monetary value of assistance or items and quantities they can be exchanged for on a barcode, a magnetic band or microchip on the card, or by short message service (SMS). Electronic voucher instruments (bank card, cell phone, SCOPECARD, etc.) are issued to beneficiaries only once, whereas their redemption value or quantity is credited remotely at predefined temporal intervals.