Practical Guide for Common
Decision Logic
Cash Transfer Programme in Emergency
[April 2015]
[BANGLADESH CASH WORKING GROUP]
Abbreviations
CP:
Contingency Plan
CTP:
Cash Transfer Programme
CWG:
Cash Working Group
EMMA:
Emergency Market Mapping and Analysis
HEA:
Household Economic Approach
PCMMA:
Pre-Crisis Market Mapping and Analysis
RAM:
Rapid Assessment for Markets
TK:
Takka (Bangladesh Currency, 1USD≈TK78)
Developed as part of ECHO funded Humanitarian preparedness and response through strengthened coordination, increased capacity and advocacy to deliver appropriate Cash Based Programming in the humanitarian sector in Bangladesh
Purpose of the decision tool
The purpose of this decision tree is to guide humanitarian responders of multi sector to draw logical conclusion for designing response programme based on market
information collected through various market assessment tools, relevant to the context. The decisions tree can be used to make decision before and after crisis. The
range of market analysis approaches, like Rapid Assessment for Markets (RAM); Emergency Market Mapping and Analysis (EMMA); Pre-Crisis Market Mapping and
Analysis (PCMMA); etc can be used based on agency’s expertise and appropriateness. For the first week market related information can be gathered using 48-hrs need
assessment tool as well. This document is not designed to help the reader understand how to do the Need assessment, market analysis, cash feasibility and cash risk
assessment. However, the logical decision on appropriate response rely on these standard process of doing Need assessment, market analysis, cash feasibility and cash
risk assessment.
Who are the target users?
The document has two broad sections-the narrative part and the decision flow chart. The narrative part helps the reader understand
the flow chart better and also provide key questions to proceed with the decision logic. Hence, the market practitioners with limited
understanding of cash and market programme will find the guide helpful only if they go through both the parts. Reader with good cash
and market understanding may skim through the second part for making quick decision based on market information.
When to use this guidance?
The decision tree can be used before crisis for developing market to make it resilient to recurring crisis in the area; understanding
possible impact on market system for better preparedness; invest on traders and partners capacity building on various modalities of
CTP; and improve contingency planning. It can also be used after crisis to quickly design a response programme that doesn’t
undermine people’s dignity and harm local market system.
In contexts where
government restrictions
affect the implementation of
a response that is
seen to be appropriate, (e.g.
cash interventions in some
countries are not seen
favourable despite markets
functioning) then the use of
the Decision Tree can be
limited.
The following section will follow the phases shown in the flow chart and contains brief outline of what needs to be done in each phase to come into logical conclusions.
Phase 1: Preparedness & contingency planning
Market assessment during normal time can be done based on the Pre-crisis market assessment (PCMMA) guide available at http://emma-toolkit.org/practice/pre-crisismarket-mapping-and-analysis/
Key questions to be investigated
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What are the most likely shocks and threats that the population may face in the future?
Who are the most vulnerable groups?
What are the most critical needs of the target groups?
How is the seasonal fluctuation in terms of demand and supply of the critical needs?
What are the most likely impact of the likely shock and threat on the market system?
What need to be done to make the market system help target group?
Are the traders familiar with voucher system?
Does the partner have sufficient expertise on CTP?
Vulnerable or target group can be identified by doing livelihood and wealth ranking adapting Household Economic Approach (HEA). For detail visit
http://www.heawebsite.org/about-household-economy-approach
Collecting information with reference to above broad questions will lead towards understanding whether local market system has capacity to supply required quality and
quantity of goods/services; understand experience of traders and partners in CTP and identify vulnerable groups to be targeted before and after crisis. Having these
understanding there will be two different response options.
Response option 1: The option is appropriate if the local market system doesn’t have sufficient capacity and there is a need for strengthening market system to make it
resilient. Thus, there is a need to involve development team for interventions focusing on market development projects. Consideration should be given to increase
adaptability of market system to the potential risk from likely shock or threat. Such interventions could be one or more intervention(s) from following non-exhaustive list:
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Start enterprise development project on the most critical needs of the target group(s)
Value chain development interventions to hit the log jam
Map alternative market place
Enhance market integration by linking local market to the neighbouring markets
Support to productive and sustainable agriculture
Employment creation programme
Enrich contingency plan with market information and prepare necessary annexes for price monitoring, complaint handling, agreement with third party, etc.
Response option 2a: If the local market system can supply required quantity and quality of goods/services as and when required then implementing market integrated
projects would help strengthen market system. Partners and the beneficiaries need to be familiar with various modalities and enhance their capacity to implement Cash
Transfer Programme (CTP) at scale in case of crisis. The interventions could be one or more of the following:
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Conditional cash grant or Cash for Work for vulnerable families through partners and pure traders
Mapping of vendors, their supply and stock capacity and framework agreement with potential suppliers of emergency goods and services
Voucher programme to ensure traders and partners familiarity with voucher transfer modalities
Cash distribution to vulnerable households by using different delivery instruments
Market fair in coordination with local traders
Enrich contingency plan with market information and prepare necessary annexes for price monitoring, complaint handling, agreement with third party, etc.
PS: While choosing either of the options the project need to mainstream Disaster Risk Reduction for reducing impact of likely shock or threat to the market system and
should prepare a contingency measures to cope with forecasted crisis.
Developed as part of ECHO funded Humanitarian preparedness and response through strengthened coordination, increased capacity and advocacy to deliver appropriate Cash Based Programming in the humanitarian sector in Bangladesh
Phase 2: Assessment and analysis
Assess type and quantity of goods/services needed by the target group in the aftermath of crisis, duration and scale of needs. This need assessment can be done by using
multi sectoral tool or sector specific tool based on the agency priority. Apart from need assessment it is important to understand the situation of local market. In the first
week this can be assessed by using part of 48 hrs tool (available at http://www.ecbproject.org/ecb/efsl-48-hour-assessment-tool) or in case of more than a week by using
EMMA (see emma-toolkit.org) or any other market analysis approach that the organization is comfortable with.
Key questions to be investigated
1 Are the goods and services that people needs are available in local market?
2 Is local market able to respond to an increased demand for commodities?
3 What is the gap for goods and services that affected people need?
The market situation can be at one of the four different situations;
Scenario 1: Local Market System can supply goods/services to meet the need
Scenario 2: Local Market System can supply goods/services within a week to meet the need
Scenario 3: Local Market System has limited capacity & need support to supply goods/services to meet the need
Scenario 4: Local market has no capacity even with support
PS: One scenario for a particular item or commodity doesn’t necessarily means the same for others. Eg. If the market is green for rice, it is not necessarily green for hygiene kit.
The above scenarios are represented in the form of market traffic light, with Scenario 1&2 as Green; Scenario 3 and 4 as amber and red, respectively. The CTP best fits
into the Green and Amber situations while the response should be in-kind if the market situation is at Red.
If the market is in Green or Amber the need and market assessment should be coupled with cash feasibility assessments. The cash feasibility assessment will give an
idea about potential delivery mechanism that would be appropriate to the context. The final decision should consider the cash risk analysis.
The cash feasibility assessment should explore
 Financial institutions capacity;
 Functionality and accessibility to the technology;
 Organizational capacity to implement CTP and manage risk and;
 Social issues and beneficiaries’ preference of cash over in-kind or vice versa
Key questions to be investigated
 Can cash be delivered and spent safely?
 What might the entry points for a response be?
 Could our response harm the market?
 Might there be multiplier effects for markets?
 Anticipate risks (inflation, price distortion, security)
Based on context, beneficiaries
preferences and cost and other practical
challenges the humanitarian agency
might choose to deliver cash through
following mechanisms;
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Bank*
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Mobile phones**
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Retailers
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Directly in an envelop
Phase 3: Risk analysis
In situations when market conditions are at green/amber and CTP is found to be feasible option, the agency should do the risk assessment considering the risk to the
beneficiaries, agency and its staff that may arise due to institutional, programmatic or contextual risks. The response action by an organization; selection of CTP
modalities and delivery mechanism are influenced by organization’s ability to take risk. Understanding risk will allow us to manage or control it. The good response
programme shall look at possibility of mitigating risk through each CTP modality (both conditional and unconditional cash grant; Cash for Work; and cash/value voucher
and commodity voucher) and various delivery mechanisms before choosing the best one or the combinations. The response decisions need to balance the risk and
urgency of need for cash.
Phase 4: Response options analysis
The response options analysis is the stage to decide on programme design to meet the needs through logical conclusion based on phase 2 and 3. The pre-crisis response
options influence speed and efficiency of response in the post-crisis situation.
Response option 2b: When the market after crisis can supply goods/services to meet the needs immediately (Scenario 1) or within a week (Scenario 2) and CTP is feasible
and safe then market integrated response would best fit with the context. One week is considered to be the time required for the response implementation and for the
cash received by the beneficiaries to reach market. Hence, practically, the scenario 2 is temporary phase and market situation will be at Scenario 1. Hence, both scenarios
follow the same response option. The interventions could be one or more of the following:
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Cash grant or Cash for Work for affected families through partners and pure traders
Voucher programme
Market fair involving local traders
Response option 3: When the local area market has some capacity but needs support to supply the commodities/services to quantity and to quality to address target
groups’ needs (Scenario 3) then supporting local traders would turn Amber to Green, if not supported then Amber market situation may turn into Red as the time passes.
The interventions in this situation would be one or more of the following:
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Support beneficiary traders (loan, grant, transport subsidies, temporary storage, rehabilitation of ware house, etc) to rebuild market
Distribute cash through beneficiary traders
Voucher programme through beneficiary traders
*Currently, using Bank to deliver cash in Bangladesh has several challenges as there is no provision for zero balance account & opening an account is complicated. This would require advocacy by the humanitarian agencies to influence
policy. However, Bank or other financial service providers can still facilitate cash distribution through their branches or agents.
**Most common form of delivering cash through third party in Bangladesh, despite having mobile bank account is lengthy process and the maximum cash that can be transferred using mobile is TK30,000. The cases of agent charging
commission from beneficiaries have been reported in several instances.
Developed as part of ECHO funded Humanitarian preparedness and response through strengthened coordination, increased capacity and advocacy to deliver appropriate Cash Based Programming in the humanitarian sector in Bangladesh
Response option 4: When the market has the capacity to provide required quantity and quality of goods/services with or without support but the providing cash is adding
risk to the beneficiaries then the response to bringing back market to the affected community would be the best option. The risk to the community is not only security
risk; it can also be the risk to their livelihood needs. For example if the beneficiaries has to pay high transport fare to use their cash in local market providing cash would
encourage them to sell their productive assets while coming to the market to buy goods/services that is needed. Possible interventions under response 4 are:
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Purchase commodities from the local market and distribute
Organize market/voucher fair
Response option 5: When the local market doesn’t have capacity to supply required goods or services, even with the support then the supply need to be done from the
market outside the regular market for affected people. However, the agency should look at possibility of buying from the neighbouring market. The procurement will
require agency to follow standard procurement policy.
Developed as part of ECHO funded Humanitarian preparedness and response through strengthened coordination, increased capacity and advocacy to deliver appropriate Cash Based Programming in the humanitarian sector in Bangladesh
Pre-Crisis Market
Assessment
(PCMMA)
Response option 1
Response option 2a
<Phases>
1. Preparedness &
contingency planning
Consider market integrated projects to
increase knowledge of staff and traders
- Deliver Cash to the vulnerable families
through partner/pure traders
- Improve your Contingency plan with
market information (include ready to use
annex in CP)
- Coordinate with Development team to
Design and implement market
development projects on selected Critical
Local Market System
can supply required
quality and quantity of
goods/services
Yes
-Commodity/Cash Voucher
No
goods/services
-Map out alternative market place and
facilitate market integration (linkage with
neighbouring market)
CRISIS
2. Assessment &
analysis
Need Assessment
Local Market
System can supply
goods/services to
meet the need
Market Assessment
No
Local Market System
can supply
goods/services within
a week to meet the
need
No
Local Market System
has limited capacity &
need support to
supply goods/services
to meet the need
Yes
Yes
Cash feasibility assessment (Financial institutional capacity; technology;
Cash Risk Analysis
organizational capacity; social issues and beneficiaries’ preference)
3. Risk Analysis
Cash Risk Analysis
Yes
Both men and women
have easy and safe
access to local market
Response options Response option 2b
analysis
No
Consider market integrated
projects
- deliver Cash to the vulnerable
families through partner/pure
traders
-Commodity/Cash Voucher
Local market has no
capacity even with
support
No
Response option 3
Response option 4
Response option 5
- Support beneficiary traders to
rebuild market
-distribute cash through beneficiary
traders
-voucher prog through beneficiary
traders
-Purchase commodity from the
local market and distribute
-Organize market/voucher fair
-Purchase commodity from
Continue Market monitoring till it is green to switch to
Response option 2/4 (sometime it may change to red to
inform response option 5)
Figure: Decision flow chart for multi cluster Cash Transfer Programming
neighbouring market (localregional-national-international)
and distribute (In-Kind support)
Legend
Refer to the document (in this
case the narrative part)
Intermediate process
Pre-defined process
Start/end
Decision
Developed as part of ECHO funded Humanitarian preparedness and response through strengthened coordination, increased capacity and advocacy to deliver appropriate Cash Based Programming in the humanitarian sector in Bangladesh
This guideline is the product of ECHO funded project entitled “Humanitarian preparedness and response through strengthened coordination, increased capacity and
advocacy to deliver appropriate Cash Based Programming in humanitarian sector in Bangladesh”. The guideline was developed with the active participation of member
organizations in the Cash Working Group, Bangladesh. The participating members (GRC, WFP, FAO, Oxfam, Care, Christian Aid, Concern World-wide, Plan,.............)
contributed to bring this guide to the current shape by giving their inputs during the workshop held on 31 March-01 April, 2015 in Dhaka. The discussion was facilitated
by Rajesh Dhungel, Regional Capacity Builder from Oxfam in Asia and Eun Jung Yi, Technical Coordinator for CWG, Bangladesh and contributed to bring this product for
your refence.
Developed as part of ECHO funded Humanitarian preparedness and response through strengthened coordination, increased capacity and advocacy to deliver appropriate Cash Based Programming in the humanitarian sector in Bangladesh