Financial Inclusion of People - Benefiting from Humanitarian Cash Transfers

Humanitarian cash transfers have nearly doubled as a proportion of humanitarian assistance since 2016, offering a flexible means of supporting vulnerable communities. While cash transfers address immediate needs such as food security, they also provide many beneficiaries with their first exposure to formal financial services. However, most recipients do not continue using financial services beyond the initial assistance period, missing an opportunity to foster long-term financial inclusion.

Proparco and ICRC wanted to bridge this gap by exploring how private-sector solutions can sustain financial inclusion beyond the duration of humanitarian aid, thanks to a deeper understanding of both the Demand and the Supply side. The study relies on a combination of secondary research and more than 30 Key Informant Interviews with NGOs, international organizations, think tanks, financial service providers, and government officials.

To turn temporary access into long-term inclusion, several enabling conditions are essential: (i) economic stability and continuity of transfers, (ii) relevant, affordable financial products, (iii) coordination between humanitarian and development actors, and (iv) stronger engagement from local financial institutions.

Key recommendations: (i) integrate humanitarian cash into national social protection systems, (ii) promote “cash-plus” approaches that combine financial and non-financial support and (iii) strengthen local FIs to serve these populations sustainably.