When giving money is a smart investment

A flood in southern Nepal in 2017 left Krishna Maya Char and her husband and five children with no grain, no clothes, and nothing to eat.

Canadian Lutheran World Relief and their partners in Nepal were there, and provided essentials such as food and clothes to the flood survivors. But Char’s family needed more than that to rebuild their lives.

So CLWR provided her family with a grant. Money. Cash.

This is not unusual. In fact, many Humanitarian Coalition members include targeted cash transfers in their emergency response work. For example, when Typhoon Doksuri struck Vietnam in September 2017, CARE Canada provided a cash grant to 115 households to assist them in repairing their homes. Oxfam Canada implemented cash transfers to 500 flood-affected households in Northern India in 2017. In response to flooding in Ethiopia in May 2018, Islamic Relief Canada distributed cash vouchers every month for three months so 650 vulnerable households could purchase basic necessities.

What is a cash transfer?

During humanitarian crises, where there is still a local market in place, cash transfers provide financial assistance directly to affected people so they can decide to purchase what they need most. There are different types of cash transfers:

1. Unconditional cash transfers: disaster-affected people are given money with no conditions or requirement to repay;

2. Vouchers: a voucher is a paper, token or electronic card that can be exchanged for goods from pre-selected vendors;

3. Cash for work: payment (in cash or vouchers) is provided as a wage for work, usually assisting in disaster recovery and reconstruction.

Why would anybody just give money away?

1. Giving money to people who need it is a direct, low-cost means of providing assistance.

2. People, especially women, can decide for themselves what they need the most.

3. People who have money, spend money … and help rebuild their local economy.

4. Evidence shows that cash transfers are low-risk – there is surprisingly little corruption or fraud in these programs.

5. Cash transfers can be an effective way to fill a gap when other programs are not available.

6. Cash transfers can help communities through a season of drought or low crop yields.

7. Cash for work provides jobs to able-bodied survivors and gives them pride in their own community’s recovery

8. A little extra money will help some people generate their own income and become independent.

Which brings us back to Char.

This ambitious woman used the funds she received from CLWR to start up a grocery store, which had the advantage of supplying essential commodities to her local community. "This grocery is the bread maker for my family,” she says. "I am now considering adding more inventory, increasing my profit margin and income as well. This shop has taught me the skills to make money and do business."

"Along with the skill of entrepreneurship, the store empowers me within my own family. I don't have to depend on my husband and son for money anymore. This is really a big thing. I know the flood devastated my property and life but it also came as a boon to women like me to learn the skill of running a business."

Given her new business skills, Char says she is confident that the days ahead will be better than the past. "If the business runs normally, I can cope with any future flood financially," she says.

Sometimes, a little cash can go a long way.