The role of the private sector in humanitarian response is a somewhat divisive topic amongst international humanitarian agencies. They are however, involved in any humanitarian response. Aid agencies purchase commodities, rent offices, hire trucks and open bank accounts to pay staff. People affected by crisis depend on businesses and markets to purchase food and often to earn a living.

What is particular about cash transfer responses is that aid agencies may engage businesses to transfer money directly to aid recipients who purchase what they need rather than receiving aid in-kind. Experience to date suggests that humanitarian cash transfers offer new opportunities for reaching people with assistance but that aid agencies need to be more sophisticated in understanding markets, using financial systems, navigating regulations and protecting beneficiary data.

Sarah Bailey and Laura Gordon