Humanitarian agencies and donors are increasingly advocating for the use of cash-based assistance (CBA), recognising its flexibility and potential to empower affected communities. Both the Grand Bargain and the Cash Learning Partnership have been at the forefront of promoting the integration of CBA programming into standard humanitarian responses. Given the evolving complexity of crises, understanding how these programmes are locally implemented and interact with the socio-political and economic realities of their specific contexts is critical. CBA is often implemented in conjunction with other forms of assistance – such as in-kind support and service provision – highlighting the importance of a comprehensive, multi-faceted approach to address the diverse and layered needs of vulnerable populations.

This SSHAP Brief explores the role and implications of CBA in humanitarian efforts within the complex environments of Lebanon and Syria. It aims to provide a contextualised understanding of CBA – its potential and challenges, including how these programmes function alongside more traditional approaches to assistance delivery. Humanitarian actors often navigate logistical obstacles, such as access to financial services and beneficiary verification, while witnessing the immediate impact of inflation and market instability on the purchasing power of households receiving cash assistance. Their perspectives highlight the importance of adapting assistance strategies to local contexts, emphasising that what works in one area may not necessarily apply in another.

This brief presents case studies and data from Lebanon and Syria, along with field workers’ viewpoints. It draws on academic and grey literature, including reports from leading NGOs and government agencies. The evidence is backed up by consultations and informal conversations with stakeholders involved in CBA programmes in Lebanon and Syria.

Key considerations

  • Develop tailored implementation plans for equitable assistance distribution and social cohesion. This means assessing market conditions, ensuring security, addressing logistical challenges, and considering power dynamics to avoid social tensions through collaboration with local authorities in Lebanon and Syria while understanding regional complexities.
  • Utilise insights from a range of sources to design inclusive programmes. Combining desk research, focus group discussions and stakeholder consultations informs the design of inclusive programmes that address gendered power dynamics and respect cultural norms. Adapting interventions based on community feedback helps ensure interventions remain effective, equitable, and responsive to evolving local dynamics.
  • Strengthen security and monitoring to ensure assistance reaches intended recipients. Establishing robust protocols for cash distribution that prioritise security at every stage of the process safeguards distribution points and prevents theft, while implementing biometric verification and secure digital platforms can minimise the risk of fraud.
  • Assess market conditions and embed cash transfers in local financial infrastructure to ensure value of assistance is retained. Conduct comprehensive assessments of local market conditions to evaluate functionality and stability. This will inform the design of cash transfer programmes that are integrated within the local financial infrastructure, ensuring that the value of assistance is preserved and effectively utilised by beneficiaries.
  • Combine CBA with other assistance mechanisms and promote sector synergies to address the diverse needs of recipients and enhance long-term recovery and resilience. Integrating CBA with other assistance mechanisms (such as in-kind support, health services, etc.) supports broader humanitarian and development strategies, while incorporating conditionality – such as linking cash transfers to participation in education, or health programs – can further improve the impact and sustainability of assistance efforts.
  • Research the long-term socio-economic impacts of CBA to understand when CBA is most effective. Research is needed to determine when CBA promotes sustainable development and strengthens institutional capacity, and when it risks introducing operational challenges and inefficiencies that could undermine long-term recovery efforts.

Cash-based assistance in Lebanon and Syria

Cash-based assistance is increasingly recognised globally for empowering recipients, promoting dignity and stimulating local economies. However, its effectiveness is closely tied to the contextual environment in which it is implemented.

Challenges to humanitarian efforts

Both Lebanon and Syria are grappling with severe and overlapping crises that significantly challenge humanitarian efforts. In Lebanon, the combined impact of the ongoing economic crisis and the significant influx of people fleeing conflict has put additional strain on the country’s fragile infrastructure. Addressing these pressures with inclusive approaches can help foster resilience and social cohesion while ensuring that the most vulnerable groups are supported.3 Meanwhile, Syria continues to experience widespread displacement, infrastructure destruction and a collapse of essential services as a result of prolonged conflict.5 These crises are further compounded by economic instability and the lingering effects of the COVID-19 pandemic and the Kahramanmaraş earthquake of 2023.

Knock-on effects of economic collapse

Lebanon’s economic collapse – characterised by hyperinflation, a failing financial system and ongoing political instability – has left many struggling to meet basic needs.6 The pandemic worsened this situation by disrupting supply chains and increasing unemployment. This, in turn, has placed strains on healthcare systems and deepened food insecurity.7,8 Similarly, Syria faces persistent conflict, disease outbreaks and damaged infrastructure, making access to essential services and the delivery of assistance increasingly difficult.5 In Lebanon, while agencies strive to provide essential services like shelter, healthcare, and education, the deteriorating public systems limit the effectiveness of these interventions.9 In Syria, the fragmented control of territory complicates assistance delivery, particularly in areas controlled by non-state actors.10

Collaboration to improve operational efficiency

To overcome these challenges, humanitarian agencies in both Lebanon and Syria have adopted integrated models of assistance that combine cash and in-kind assistance. Effective coordination among partners is crucial to ensure these models function smoothly, avoiding duplication of efforts and enhancing the overall impact of assistance. Collaborative efforts improve resource allocation and streamline service delivery, reducing operational inefficiencies and fostering a more comprehensive response to the needs of affected populations. Data from the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) shows that cash assistance accounted for roughly one third of total assistance in 2022, despite overall reductions in assistance funding.11 This combined approach seeks to maximise impact in the face of Lebanon’s economic collapse and Syria’s ongoing conflict.5

Cash grants for immediate needs

In Lebanon, cash grants are used to cover essential expenses such as food, rent, and healthcare, supplemented by in-kind assistance like food parcels and shelter materials. These programmes primarily benefit vulnerable groups, including Syrian refugees, low-income Lebanese families, and other marginalised communities. Vulnerability is typically assessed based on criteria such as household income, family size, health conditions, and the presence of individuals with special needs, ensuring that cash assistance reaches those most in need.12

Despite some stabilisation of Lebanon’s currency, global inflation has increased the cost of goods, reducing the purchasing power of cash assistance and its overall effectiveness.12 However, cash-based programmes continue to demonstrate positive outcomes by offering recipients the flexibility to prioritise their most urgent needs, such as food, housing, and healthcare.12 In Syria, cash grants similarly play a critical role in addressing urgent needs, particularly for vulnerable populations such as displaced families; low-income households; and individuals requiring shelter repairs, healthcare, or food support.13

These programmes often work in tandem with in-kind assistance to meet immediate needs amidst ongoing challenges. Nevertheless, inflation and ongoing conflict continue to strain these efforts, limiting the capacity of CBA programmes to fully meet the needs of the population.14 Despite these difficulties, CBA programmes provide essential flexibility, allowing recipients to adapt their spending according to their most pressing requirements.13

Cash-based interventions to meet context-specific needs

Cash-based interventions have become central in addressing the intersecting crises in Lebanon and Syria, providing flexibility to beneficiaries and supporting local economies. In Lebanon, organisations such as the United Nations High Commissioner for Refugees (UNHCR) and the World Food Programme (WFP) offer two types of cash assistance: ‘Al Matjar’, a card for in-store purchases, and a ‘Monetary’ card for cash withdrawals. These programmes target vulnerable populations, including Syrian refugees, low-income Lebanese households, and individuals with specific needs, such as health conditions or disabilities.

To ensure that cash assistance reaches those most in need, UNHCR and WFP use criteria such as household income, family size and individual vulnerabilities, distributing cash transfers based on detailed needs assessments conducted through field surveys and data analyses.2 This approach helps prioritise assistance to those facing the greatest hardships, ensuring that vulnerable populations can meet essential needs like food, medicine and housing, while also stimulating local markets. However, there is often a lack of consensus among responders regarding which groups should be considered the most vulnerable. Additionally, the scarcity of reliable data makes it difficult to accurately identify qualitative differences in vulnerability, further complicating the equitable distribution of cash transfers.

In Syria, cash-based programmes are similarly tailored to support targeted groups such as women-headed households, children, and families in need of medical or livelihood assistance. These interventions address immediate needs like shelter, repairs and healthcare expenses.8

Challenges to meeting context-specific needs

Both countries face significant challenges, particularly in rural and conflict-affected areas where limited access to financial services disproportionately impacts rural populations, conflict-affected communities, disabled people, the elderly, and women-headed households. This reduces the effectiveness of cash-based programmes.

Issues like beneficiary verification further complicate the equitable distribution of assistance.8 In Lebanon, rapid inflation has diminished the value of the cash assistance allocated to recipients, making it increasingly difficult for beneficiaries to meet their basic needs.7 Additionally, the cash assistance provided often falls short of addressing the real nutrition needs and emergencies in these contexts.

One major barrier is the significant operational costs involved in cash-based interventions (CBIs) – including travel, logistics, and programme implementation – which can substantially reduce the amount of cash distributed to beneficiaries. Raising donor awareness about these high operational costs is crucial for scaling up responses and ensuring that cash assistance programmes are adequately funded to address the full scope of critical needs.

Diverse modes of assistance to meet diverse needs

To navigate these complexities, adaptable and context-specific assistance strategies are essential. Cash-based interventions offer flexibility and autonomy but must be tailored to local conditions. In urban areas with functioning markets, direct cash transfers prove highly effective. In contrast, rural or conflict-affected regions, where market access is restricted, may benefit more from voucher-based or mixed assistance models to ensure access to food and healthcare.15

The dual approach of combining cash grants with in-kind assistance has gained traction, as it allows beneficiaries to maintain purchasing power while accessing critical items such as food parcels, hygiene kits, and shelter materials.16 Humanitarian agencies are increasingly adopting context-specific models to improve the effectiveness of cash assistance in Lebanon and Syria.

Urban and rural population needs

In urban areas, direct cash transfers empower beneficiaries to address their most pressing needs. Conversely, in rural or conflict-affected areas with limited market access, vouchers or mixed assistance models provide targeted support and ensure that essential goods remain accessible despite market disruptions. Meanwhile, cash transfers can be hindered by damaged infrastructure, insecurity, inflation, price volatility, and displacement, which complicate assistance distribution and reduce its effectiveness.15,17

In southern Lebanon, for instance, cash assistance programmes have been scaled up to support displaced families – both refugees and Lebanese nationals – covering essential needs amidst ongoing disruptions. While direct cash transfers remain effective in areas with functional markets, in regions with limited access, a combination of cash and in-kind assistance, such as vouchers for food, water, and hygiene products, ensures that basic needs are met even under challenging circumstances.14,15

A well-coordinated approach, adapting to local market conditions and security challenges, ensures that assistance remains flexible and effective. This tailored strategy enhances the resilience of vulnerable communities.

Lessons learnt from implementing CBA in Lebanon and Syria

In humanitarian assistance, the adoption of CBA mechanisms has emerged as a transformative approach to addressing the needs of vulnerable populations.18 CBA is favoured by many donors and organisations for its ability to empower recipients, streamline assistance delivery processes, stimulate local economies and adapt to evolving needs effectively.

Dignity and empowerment

One of the primary advantages of CBA is its ability to restore dignity and empower recipients by allowing them the flexibility to prioritise their own needs, regardless of the amount of cash provided. Unlike in-kind assistance, which may not always align with beneficiaries’ preferences or cultural practices, cash grants provide individuals and families the autonomy to make decisions based on their unique circumstances, thereby enhancing their dignity and agency. For instance, cash transfers enable a household to choose between purchasing food, paying rent, or meeting other pressing needs.19

Many refugees prefer cash assistance over in-kind assistance, viewing it as a means of restoring their sense of control and independence.20 This preference is reinforced by the United Nations Children’s Fund’s (UNICEF) Post-Distribution Monitoring reports, which indicate that over 91% of Vulnerable families had favoured cash assistance.21 In Syria, for instance, families with children with disabilities were able to use cash transfers to access essential services like physiotherapy and hearing assistances, significantly improving their quality of life – something that would have been unattainable through in-kind assistance alone.22

Efficiency and cost-effectiveness

Compared to the procurement, transportation, and distribution of physical goods, cash transfers entail lower operational costs and shorter delivery times.3 In Syria, WFP, in partnerships with local banks and mobile network operators, distributed electronic vouchers to vulnerable families via mobile phones. These vouchers could be redeemed at local markets for essential food items, allowing beneficiaries the flexibility to make choices that best meet their specific needs.

This approach not only leveraged existing financial infrastructure to streamline assistance delivery but also empowered recipients to make choices according to their specific needs, and maximised the impact of humanitarian funds, reaching more people in need. By delivering cash transfers through digital payment systems, the organisation was able to efficiently reach a larger number of beneficiaries while minimising operational costs, ensuring timely support to vulnerable populations affected by the Syrian crisis.5

Local market support and economic stimulus

Cash injections into local economies, exemplified in Lebanon and Syria, act as critical drivers of economic activity and livelihood support. In Syria, for instance, cash assistance provided by humanitarian organisations enabled recipients to purchase essential goods and services from local markets, thus stimulating demand and generating income for businesses and workers amidst the ongoing conflict.23 This impact was particularly evident when the same neighbourhood was targeted by multiple cash programmes, further amplifying the economic benefits within the community.

In Lebanon, for instance, cash grants – such as cash for work programmes or cash vouchers –distributed to vulnerable populations, including both refugees and host communities, played a crucial role in strengthening local economic resilience.24 By boosting consumer expenditure and supporting small businesses, these interventions facilitated the recovery process amid the country’s economic crisis and refugee influx. This multi-faceted approach not only enhanced economic stability but also helped mitigate the adverse effects of the crisis on local communities.3 This localised economic stimulation fosters sustainable development and restores a sense of normalcy and self-reliance among affected communities, laying the groundwork for long-term recovery and resilience-building efforts.25

Flexibility and adaptability

Cash-based interventions have proven essential in addressing the intersecting crises in Lebanon and Syria, offering flexibility to beneficiaries and supporting local economies. In Lebanon, cash assistance was swiftly and efficiently deployed during the economic crisis due to the country’s pre-existing financial infrastructure, including digital payment systems and partnerships established with local banks and mobile operators. These systems enabled organisations like UNHCR and WFP to rapidly deliver cash transfers directly to beneficiaries through e-vouchers or mobile money, significantly reducing delays associated with logistics and procurement.26 The widespread use of mobile phones further facilitated the rapid distribution of assistance.

However, this efficiency was not only a result of robust infrastructure but also driven by the severe economic downturn and hyperinflation that made traditional in-kind assistance less effective, as the purchasing power of local currency plummeted. Cash assistance became a more adaptable and timely solution, enabling beneficiaries to meet immediate needs in a volatile market environment.7 The ability of CBA to adapt to rapidly changing conditions has been key to its success in both Lebanon and Syria. Cash transfers can be customised to meet the evolving needs of beneficiaries, enabling humanitarian organisations to quickly adjust to shifting circumstances.27 This adaptability is particularly valuable in protracted crises or rapidly changing environments, where needs may evolve at different stages of the humanitarian response.28 In Lebanon, for example, following the Beirut Blast, many assistance agencies transitioned from direct intervention to providing financial assistance, allowing affected homeowners to take charge of their recovery and reconstruction efforts, demonstrating the effectiveness of CBI in addressing urgent needs.29 In Syria, CBI have similarly demonstrated their adaptability.

Reduced logistical burdens and increased accountability

Cash-based assistance presents logistical advantages and enhances accountability in humanitarian operations in Lebanon and Syria. In Lebanon, during the economic crisis, cash transfers were quickly deployed to assist vulnerable populations amidst the challenging socio-economic conditions, bypassing the complexities of procuring and transporting physical goods.8 Similarly, in Syria, cash assistance was efficiently distributed to displaced families in hard-to-reach areas affected by conflict, evading logistical challenges and ensuring timely assistance.30 This streamlined approach not only reduced operational expenses but also strengthened the transparency and effectiveness of humanitarian interventions, ultimately improving outcomes for those in need.

Operational challenges to cash-based interventions

Implementing CBI in Lebanon and Syria comes with various potential drawbacks, such as the risk of fund diversion due to deficiencies in governance and corruption, increased protection risks during dispersal and the potential to exacerbate inflation. Additionally, obstacles related to market functionality, compliance with external sanctions, and governmental influence on assistance efficacy add further complexity to assistance delivery endeavours.

More research is needed to understand the impact of CBI on employment, income stabilisation, family dynamics and the overall resilience of local economies. Additionally, there is a need to assess how CBI influences governance structures and service delivery systems to avoid creating operational strain and inefficiencies.

Diversion of funds

In both Lebanon and Syria, the risk of diverting or misusing cash assistance is heightened by ongoing conflicts, political instability, and systemic corruption. Weak governance structures and widespread corruption increase the likelihood of theft, misallocation, and inequitable distribution, making it difficult to ensure that assistance consistently reaches its intended recipients.

In Lebanon, UNHCR and WFP have addressed corruption and inefficiency by implementing stricter monitoring, improving transparency, enhancing data management, and collaborating with local organisations for better oversight and accountability.

Additionally, rigorous verification processes have been implemented, such as home visits and cross-checking data at multiple levels, to ensure the integrity of cash transfers. This approach was particularly effective in areas like the Beqaa Valley, where vulnerabilities were high and the potential for assistance diversion was significant.31

Protection risks during distribution

Dispersing cash transfers can expose recipients to various protection risks, including theft, coercion, and exploitation. In conflict-affected or insecure environments, beneficiaries may face escalated security threats when carrying or accessing cash, putting their safety and well-being at risk.

The security situation in Syria is highly volatile, with frequent clashes and a lack of safe transportation routes, leaving beneficiaries vulnerable to theft, extortion, or violent encounters as they travel to distribution points. Women, children, and the elderly are particularly vulnerable to abduction, harassment, or exploitation during these perilous journeys.30 Therefore, it is essential that cash assistance programmes be supported by adequate preventive measures. Increased understanding and commitment from donors and agencies are crucial to implementing these protections and ensuring the overall effectiveness and security of CBI.

In Lebanon, similar challenges are evident. Insufficient funds and overcrowding at distribution points compel many recipients to make repeated trips to collect their assistance. This situation is exacerbated for refugees who face difficulties due to their lack of residency or official documents, increasing their vulnerability during each journey. In both Lebanon and Syria, these conditions highlight the urgent need for enhanced security measures and alternative distribution methods to safeguard recipients and ensure assistance reaches those in greatest need.8

Gender dynamics

Humanitarian organisations in Lebanon and Syria face significant challenges in addressing gender dynamics within CBA programmes. While these interventions are designed to empower vulnerable populations by providing financial autonomy, they often inadvertently exacerbate existing gender inequalities. In patriarchal societies, men frequently control household finances, which limits the intended benefits of cash transfers for women.

For instance, in rural areas of Lebanon, there have been instances where male family members dominate financial decisions, reducing women’s autonomy and increasing their vulnerability to coercion or gender-based violence.32 Additionally, cultural norms restricting women’s mobility can hinder their access to cash assistance, especially in regions where women are confined to domestic spaces and unable to reach distribution points or fully utilise the funds. This issue is particularly concerning in high-poverty and displacement areas, where women’s economic participation is vital for household survival. Compounded by limited financial literacy in marginalised communities, these barriers reduce the effectiveness of CBA.9

However, in Syria, where mothers are often the primary recipients of cash transfers, they typically have direct access to funds, though this approach still necessitates monitoring women’s safety and may require costly behavioural change interventions. To address these issues, humanitarian organisations have begun incorporating gender-sensitive approaches into their cash assistance programmes. For example, in Southern Lebanon, digital cash transfers via mobile phones have been introduced, allowing women to receive funds more discreetly and reducing the risk of financial control by male relatives. However, these efforts require ongoing adaptation and monitoring to ensure that CBA supports women’s empowerment rather than reinforcing existing power imbalances.1

Potential impacts on inflation

Large-scale cash injections into Lebanon and Syria have had significant impacts on inflation, exacerbating affordability challenges for both assistance recipients and local populations. In Lebanon, the 2021–2022 emergency cash transfer programme aimed to support vulnerable groups amidst a severe economic crisis. However, this influx of cash contributed to rapid price increases. For instance, the cost of basic food items surged dramatically, with bread prices rising by over 300%.33 Additionally, the housing market saw price hikes as increased cash flow led to higher rental costs, further straining low-income families.34 The Lebanese pound’s continued depreciation also eroded purchasing power, compounding the economic instability.

Similarly, in Syria, the UN’s CBA programme from 2019 to 2021 highlighted inflationary effects. Increased demand from cash assistance led to significant price rises in essential goods. The cost of a basic food basket rose by approximately 200% from pre-conflict levels.35 Fuel prices also soared, more than doubling by 2021, driven by heightened demand. The Syrian pound’s depreciation worsened during this period, contributing to market instability and further increasing prices for necessities.

Impact of economic crisis on markets

Cash-based assistance depends on functional and accessible markets to ensure that recipients can effectively use cash transfers to meet their needs. In situations where markets are disrupted or dysfunctional, such as during conflicts or economic crises, cash transfers may not be sufficient to alleviate poverty. In both Lebanon and Syria, ongoing conflicts, political instability and socio-economic challenges have severely strained economies.36 As the economic crisis has deepened, market functionality has significantly declined, diminishing the effectiveness of CBA in addressing people’s needs. Consequently, significant price increases have made many products unaffordable for beneficiaries.37

It is important to note that in urban areas, market competition can be beneficial. In cities with well-established markets, competition among vendors often leads to better prices and a wider variety of goods, which can enhance the effectiveness of CBA. For example, in urban areas like Beirut, cash transfers have been more effective than in rural regions because the presence of competitive markets helps regulate prices and ensures better availability of goods and services. In contrast, rural areas, where markets are less developed or non-existent, face significant challenges.

Cash programmes in these areas often struggle to achieve their intended impact due to the lack of functioning market infrastructure, as seen in the case of high transport costs in Syria and the operational difficulties faced by financial services providers (FSPs) amid liquidity shortages and regulatory constraints in Lebanon.38 Thus, addressing these disparities and ensuring market functionality across both urban and rural areas is crucial for optimising the impact of CBA.37,39

Strong monitoring systems as a prerequisite

Humanitarian organisations in Syria and Lebanon face significant challenges in monitoring and managing CBA, including widespread fraud, security concerns, infrastructure limitations, and data collection issues. Additionally, these organisations contend with security risks, inadequate infrastructure, cultural barriers and high population mobility – all of which further complicate effective assistance delivery.37,39 Focusing on the integrity of the distribution process can significantly reduce vulnerabilities and enhance the overall effectiveness of CBA.

In Syria, ongoing conflict and instability complicate monitoring efforts. This is particularly linked to challenges in tracking and assessing the longer-term impact of assistance. For instance, in some areas, security risks and damaged infrastructure hinder effective oversight, making it difficult to ensure assistance reaches the intended recipients.30 The high mobility of internally displaced persons, due to shifting frontlines and violence, further complicates these efforts. Monitoring the use of cash assistance has seen significant advancements, with most implementers excelling in analysing and ensuring proper implementation. However, when it comes to understanding the broader impact of assistance – especially its long-term effects – there is a notable gap, as no single implementer is focused on this critical aspect.40

In Lebanon, infrastructure issues and corruption affect assistance distribution. For example, reports indicate that some stores inflate prices for e-voucher holders, and landlords often increase rent for those receiving cash transfers.39 The movement of Syrian refugees between urban and rural areas in Lebanon creates additional challenges, making it difficult to maintain accurate assistance records and ensure assistance effectiveness.8

Impact of international sanctions

Cash assistance programmes in Lebanon and Syria face significant challenges due to external sanctions and regulatory constraints, which severely undermine their effectiveness. In Syria, ongoing conflict coupled with economic sanctions imposed by various countries complicates secure financial transactions, making it difficult for humanitarian organisations to transfer funds efficiently.30 Similarly in Lebanon, the economic crisis and political instability have triggered sanctions that disrupt financial systems, further complicating the delivery of assistance.39 To navigate these obstacles, assistance organisations have had to partner with international financial institutions and local entities to facilitate secure money transfers. However, these partnerships often come with substantial commission fees, which place a significant financial burden on humanitarian organisations. This diverts much-needed resources away from direct assistance, ultimately reducing the overall impact of humanitarian efforts.

Government and central bank influence

Government policies and central bank decisions can significantly influence CBA, particularly in fragile or heavily regulated financial systems. Changes in priorities, fiscal policies, or monetary regulations can affect the availability and effectiveness of cash transfers, impacting beneficiaries’ purchasing power and exchange rates.41

In Lebanon and Syria, government actions have directly affected cash transfer availability and accessibility. During its economic crisis, Lebanon’s central bank-imposed restrictions on foreign currency transactions. In Syria, shifts in government priorities and fiscal policies due to ongoing conflict have created similar challenges for humanitarian organisations.39,42

In Syria, for example, the existence of dual exchange rates (two different exchange rates for the same currency) has created significant challenges for CBI, deterring donors due to financial inefficiencies. For an extended period, the official exchange rate was less than half of the parallel market rate.43 This makes it difficult for humanitarian agencies, including the UN and INGOs (which are required to operate using the official rate), to maximise the impact of their assistance.31

By the end of 2023, efforts to narrow the gap between these rates led to some improvements.15,44 In addition, the Syrian Cash Working Group – which includes all implementing partners (INGOs, NGOs and the UN) – continues to advocate and coordinate to overcome challenges and setting the value of cash transfers. More evidence is needed to understand how exchange rate discrepancies and liquidity constraints specifically impact the effectiveness of cash assistance. Similarly, Lebanon’s central bank has mandated the use of the national currency at a fixed rate for financial support, causing monetary transfers to lose over 80% of their value –  as the official exchange rate is approximately 80% lower than the market rate.39

Challenges to financial service providers

Financial service providers (FSPs) are crucial to the success of CBI. However, several challenges impact their effectiveness, including lack of credible FSPs, accessibility constraints in certain regions, limited capacities of existing FSPs and the effects of sanctions on expanding FSP networks. In Syria, ongoing conflict has severely disrupted banking infrastructure and financial systems. For instance, many banks have been damaged or are non-operational, severely limiting access to financial services for beneficiaries. This disruption has compounded difficulties in delivering cash assistance effectively.41

Similarly, in Lebanon, economic instability and regulatory barriers present significant obstacles for FSPs. These are further compounded by sanctions imposed on Lebanon and Syria, which have restricted the expansion of FSP networks by limiting their access to international financial systems and investment opportunities.30,39 The Lebanese economic crisis has led to severe liquidity shortages and restrictions on banking transactions, with reports from Beirut indicating that many financial institutions are struggling to operate due to regulatory constraints and a shortage of accessible cash reserves, making it increasingly difficult to deliver cash assistance to beneficiaries.39

Several actions can be taken to mitigate the challenges outline above:

  • Utilise tools like Kobo Toolbox for real-time tracking and monitoring of transactions to improve transparency and efficiency.
  • Use market price monitoring systems to track fluctuations and adjust assistance to mitigate impacts on market volatility.
  • Partner with local vendors to ensure adequate supply and stable pricing.
  • Adopt digital payment platforms and partner with local banks to enable reliable cash distribution.

Conclusion

The shift from traditional in-kind assistance to CBIs in Lebanon and Syria marks a significant evolution in humanitarian assistance. This transition reflects a growing recognition of the benefits of cash assistance, particularly in promoting dignity, flexibility, and economic empowerment for recipients. In these complex environments, where ongoing conflicts, economic instability and political upheaval exacerbate the challenges of assistance delivery, CBIs offer a more responsive and adaptable approach.

However, the implementation of cash-based assistance in Lebanon and Syria faces significant challenges, including fund diversion and security risks, highlighting the need for robust monitoring systems. While implementing partners, particularly the UN, are well prepared to mitigate these risks, the associated costs remain a critical concern. A key issue lies in donors’ understanding of the true costs required to deliver these programmes effectively.

It is therefore essential to convey the importance of increasing donor sophistication and awareness of the complexities and financial implications involved in ensuring the equity and impact of such interventions. Additionally, the volatile economic conditions in both countries, particularly hyperinflation in Lebanon and ongoing conflict in Syria, present significant obstacles to the stable and consistent delivery of cash assistance.

Despite these challenges, CBIs have proven to be a valuable tool in humanitarian response, providing affected populations with the agency to address their own needs in a manner that traditional assistance methods may not allow. The flexibility of cash assistance enables recipients to prioritise spending according to their unique circumstances. This adaptability is particularly crucial in protracted crises where needs can change rapidly.

When effectively implemented and supported by strong monitoring and protection measures, cash assistance has the potential to significantly enhance the resilience and dignity of crisis-affected populations.

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Authors: This brief was written by Claude Samaha (Basmeh & Zeitooneh) ([email protected], ORCID ID: 0009-0002-9925-3018) and Mohamad Fawzi Ammouneh (SSHAP Fellow) ([email protected]).

Acknowledgements: The brief was reviewed externally by Talaat Ali (Basmeh & Zeitooneh) and internally by Santiago Ripoll (IDS), Diane Duclos (London School of Hygiene & Tropical Medicine) and Soha Karam (Anthrologica). Editorial support was provided by Georgina Roche. This brief is the responsibility of SSHAP.

Suggested citation: Samaha, C. and Ammouneh, M.F. (2024). Key considerations: From in-kind to cash-based assistance in Lebanon and Syria. Social Science in Humanitarian Action Platform (SSHAP). https://doi.org/10.19088/SSHAP.2024.051

Published by the Institute of Development Studies: October 2024.

Copyright: © Institute of Development Studies 2024. This is an Open Access paper distributed under the terms of the Creative Commons Attribution 4.0 International licence (CC BY 4.0). Except where otherwise stated, this permits unrestricted use, distribution, and reproduction in any medium, provided the original authors and source are credited and any modifications or adaptations are indicated.

Contact: If you have a direct request concerning the brief, tools, additional technical expertise or remote analysis, or should you like to be considered for the network of advisers, please contact the Social Science in Humanitarian Action Platform by emailing Annie Lowden ([email protected]) or Juliet Bedford ([email protected]).

About SSHAP: The Social Science in Humanitarian Action (SSHAP) is a partnership between the Institute of Development StudiesAnthrologica , CRCF SenegalGulu UniversityLe Groupe d’Etudes sur les Conflits et la Sécurité Humaine (GEC-SH), the London School of Hygiene and Tropical Medicine, the Sierra Leone Urban Research Centre, University of Ibadan, and the University of Juba. This work was supported by the UK Foreign, Commonwealth & Development Office (FCDO) and Wellcome 225449/Z/22/Z. The views expressed are those of the authors and do not necessarily reflect those of the funders, or the views or policies of the project partners.

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