1. Cash Crisis and Some Ideas of How to Deal With It for CBT

2. USD in Cash will remain scarce, the situation is likely to become worse. Federal Reserve Bank is allocating Cash. Humanitarian and Development actors will theoretically be prioritized, but in practice this is of little use if the banks do not have the hard cash. The situation is especially serious in relatively remote locations. The bonds, if they really appear in October, will certainly lose much of their value almost immediately. A black market for USD in Cash will develop. The domestic banking sector will be bypassed whenever possible. Current Situation and Outlook – Part 1

3. Most of commercial transactions between traders and other players in the market will take place either in hard cash, through bank transactions abroad, by barter trade or through informal channels based on trust. With the current cash crisis, mobile money or card based distributions become difficult, as traders have only limited access to USD in cash and most likely will refuse to get paid via transfers to their bank accounts, fearing they will not be able to withdraw hard currency. Current Situation and Outlook – Part 2

4. As long as Standard Chartered will be able to provide major amount of USD in cash, distributions of cash via SECURICO will remain feasible, but with associated security risks. Mobile Money: Last distributions just concluded. No more distributions are planned for now. It has become difficult for agents to get hold of sufficient cash. If agents also run a shop stocking food items, beneficiaries can use their allocation to buy food directly. Card based systems (SmartCard): Pilot has been in preparation for some time, will probably be started this month (June), with 50 retailers. With cash crisis, retailers do not want to get paid to their bank accounts. They might have to be paid in cash, but this is obviously not a sustainable solution. Present Status of WFP’s Cash Distributions

5. Interviews of beneficiaries of cash distributions show that almost all of the cash is spent on few essential food items, plus school fees and, to a minor degree, on various other livelihood items. WFP is trying to avoid simply switching back to traditional food distributions. Therefore it makes sense to design a system that allows beneficiaries to acquire essential food items without using cash, but still maintaining free choice and possibility to acquire other essential items for livelihood. Search for Alternatives – Part 1

6. There are ideas of switching to a mixed mode CBT + In-Kind, but without doubling the logistical challenges. One solution might be using a card based system allowing beneficiaries to “buy” food commodities at sales outlets including GMB. Beneficiaries could also use the cards at shops of participating retailers to buy additional items, up to the amount loaded on the card. Many challenges remain, including the question of how to pay the retailers. Search for Alternatives – Part 2

7. World Food Programme …and now your ideas?