NGO FPA

What are acceptable levels of risk with regard to cash transfers?

The risk levels associated with financial transfers are often associated with perceived risk rather than added risk compared to other aid distribution methods. Also depending on the precise distribution method used, different levels of safeguards exist.

Distributing money by means of a bank transfer or a post office account may, in certain cases be less risky than a 'cash-in-envelope' scenario. The delivery option selected will necessarily be context specific and partners should be able to demonstrate that they have duly considered the options available and to objectively justify the choice.

In comparing available transfer modalities cost efficiency and effectiveness will be important, with the ability to achieve intended programme outcomes paramount. Depending on how the Action's objectives are framed, much of the risk may be more operational than financial. Where reputable financial institutions and established infrastructure exists in a country both donors and humanitarian organisations should strive to rely upon and support the use of existing structures.