CVA is a modality to provide humanitarian aid through physical or digital cash or vouchers. People affected by crisis are best equipped to identify their most pressing needs. CVA offers affected individuals the choice and flexibility to buy essential goods and access basic services according to their preferences. SDC uses CVA in both emergency response and protracted crises, across all humanitarian sectors, such as food security, shelter, health, water and sanitation, or education.

SDC Focus

As a CVA-pioneer, SDC has implemented over 30 projects with a CVA component since the late 1990s. Examples include providing cash to cover the needs of entire families after a hurricane or sourcing construction materials from local markets after an earthquake.

Switzerland plays three key roles in humanitarian CVA: Firstly, as an actor, SDC responds to natural events, armed conflicts and protracted crises by implementing its own projects with a CVA component. It also supports CVA activities of key UN partners, local, and international NGOs through the deployment of specialists from the Swiss Humanitarian Aid Unit (SHA). Secondly, as an advocate, SDC actively promotes the systematic consideration of CVA and adherence to quality standards. Thirdly, as a donor, SDC finances partner organisations who implement projects with a CVA component.  

Using Local Markets and Services in Humanitarian Response

While basic goods like food and water can often be purchased in local markets, donors and aid agencies have historically prioritised shipping tons of aid material from their own countries to crisis-affected regions. This practice can negatively impact the local economy, overwhelming local merchants with a huge influx of free goods and items they cannot compete with.

CVA, on the other hand, allows humanitarian actors to work with and support local markets. By shifting the place of purchase from the global to the local market, it enables shop owners or local farmers to sustain their businesses even in crisis situations. Relying on existing service providers and encouraging local solutions can also facilitate post-crisis recovery. Furthermore, CVA often reduces logistical costs, helping alleviate the strained budget situation in the humanitarian sector. However, it is crucial that local markets can cope with the increased demand.

Careful analysis of the market situation in the affected region is therefore essential when assessing the feasibility of CVA and designing successful projects with a CVA component. In addition, a reliable payment system must be in place. Most importantly, the recipients and the affected communities must be in favour of this aid modality.

Background

The use of CVA has grown rapidly in recent years, increasingly replacing in-kind distribution and currently accounting for a fifth of international humanitarian assistance. However, there is still significant potential to further increase the use of CVA. Research suggests that if CVA were delivered wherever feasible and appropriate, it could account for between 30% to 50% of international humanitarian assistance. Therefore, SDC strongly advocates for increased use of CVA in humanitarian assistance, while acknowledging the potential risks and challenges associated with ensuring good quality CVA projects.

SDC is part of the CALP Network, which comprises over 90 organisations around the world. Together with other partners, SDC works to disseminate knowledge about the use of CVA among humanitarian practitioners. It also explores the use of digital tools and new technologies to assist people in crises as efficiently and effectively as possible.