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  • View on Migration: Cash cards for refugees

Image credit: UNCHR/Jared Kohler

Speed read

  • WFP gives Syrian refugees swipe cards to buy food in selected shops

  • UNHCR hands them pre-paid cards to take out cash from machines or shops

  • Spending constraints seem unnecessary yet some donors feel unable to give cash

In an effort to feed the more than one million Syrian refugees now in Lebanon, the UN World Food Programme (WFP) gives out swipe cards, electronically loaded with US$30 each month. As the Financial Times reported recently, the money can only be used to buy food at one of Lebanon’s 185 WFP-sanctioned shops. [1]

Paul Harvey, a partner with consultant team Humanitarian Outcomes, tells me that cash transfers like this give refugees dignity and choice about where to spend their money. They’re also more efficient than shipping in food and they benefit the local economy. But there are also downsides, he says. For one thing, Lebanese shopkeepers who aren’t WFP approved are losing out. And refugees need more than food to survive — many lack tents and medicine.

I also spoke to Kerren Hedlund, an independent consultant who works with the UN High Commissioner for Refugees (UNHCR) and other organisations on best practice with cash transfers. She tells me that, like WFP, UNHCR has been giving cash to the poorest of the Syrian refugees in the region: US$100 each month over the winter, with no strings attached.

Depending on the country where they live, refugees receive this money in one of two ways. In Jordan, they’re given a swipe card connected to a UNHCR bank account, which can be used at cash machines (ATMs) to withdraw an allowance. Most ATMs in Jordan have scanners that identify individuals by scanning their irises, cutting the risk of card theft. But Lebanon lacks such technology, so the agency provides refugees with pre-paid cards that can be used to withdraw cash from ATMs and at most shops.

And, of course, it’s not just UNHCR and WFP that operate in the region — many other donors are too. So there is a “multiple card problem”, Harvey says. “Clearly it would be better if all the different aid organisations could coordinate better, so a refugee could get one card on which they are given enough money to support a range of needs.”

Hedlund agrees, but says the challenge comes when donors and agencies want to control the way people spend. “For example, WFP might say they’re worried about causing inflation [by flooding a local market with cash] and so they’re going to give people effectively a voucher to buy food, not to access cash,” she says. “But other organisations may want to give pure cash.”

These different agency mandates — and donor funding tied to specific conditions — mean it is difficult to have one card, Hedlund says. You would need a smart card that can be used both to withdraw cash from ATMs and redeem cash in approved stores, she says. “The technology for a card that can do both exists, but questions remain over whether it would be more expensive than having two different cards,” she explains.

The bigger question to grapple with, she says, is why some donors don’t feel they can give pure cash.

“In an urban emergency where most of the Syrian refugees have fled to cities where they can meet most of their needs on the local market and the risk of inflation is low, all you really need to do is give them cash,” she says. “So why not do that?”
 
Joshua Howgego is SciDev.Net’s deputy news and opinions editor. @jdhowgego


References

[1] Erika Solomon Mixed fortunes in Lebanon’s refugee economy (Financial Times, 11 April 2014)
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