Making cash work: a case study from Kenya
by Silke Pietzsch, ACF-USA July 2009

Post-election violence in Kenya in December 2007 led to the large-scale destruction of property, disruption to transport and labour markets and the displacement of an estimated 250,000–300,000 people throughout the country. Houses and livelihoods were burned down or looted; families had to abandon their homes for police-protected camps and urban centres, or took refuge with family or friends. Although already vulnerable themselves, the host population accommodated and supported the displaced, increasing the pressure on their own resources and assets.

ACF-USA began working in Nakuru Town in Rift Valley Province immediately after the violence erupted, supporting the displaced population in major camps through emergency water, sanitation and hygiene, nutrition programmes and non-food distributions. Following the initial emergency stage, a food security and livelihoods assessment was conducted in April 2008. The survey revealed the following key issues:

  • The immediate needs (food, clothing, rent/housing) of IDPs in slums were not being met, and support for host communities was lacking.
  • Income sources for IDPs in slum areas were less diverse than before. The biggest change was in the proportion of people engaged in informal/casual work, which rose from 8% to 68% for IDPs in slums and from 18% to 32% for host communities.
  • Although host families/communities reported lower asset losses (53%) than IDPs in slums (81%), they faced increased pressure on their remaining resources due to the presence of IDPs.
  • For IDPs residing in the slums, 55% of household income was spent on rented accommodation. Some 43% of households indicated that they were unable to pay their rent and thus faced possible eviction and relocation to IDP camps.
  • There was significant demand for resources to support livelihoods in the longer term, with 84% of households planning to rehabilitate their livelihoods, some with grants (42%) and others with external support (24%).

Based on these findings, ACF decided to develop a cash-based intervention to support the immediate and longer-term livelihood needs of IDPs and host communities in Nakuru Town. The decision to use cash was based on the fact that functioning markets were easily accessible and credible, and needs were very diverse.

Cash transfer programmes have become increasingly popular in recent years. Evaluations of successful programmes have highlighted the benefits of cash over in-kind distributions. For example, cash gives beneficiaries dignity and the flexibility to decide their own purchasing priorities. Distributing cash is usually less costly and more efficient than handing out commodities and can have a beneficial impact on the local economy. Nevertheless, institutional donors are still hesitant to provide funds for direct cash transfers (unconditional and non-earmarked) to support emergency response programmes. Hence, opportunities for innovation need to be actively taken. After internal technical discussions of programming options, ACF-US opted to use direct cash transfers due to the concentration of beneficiaries in this urban setting, the presence of easily accessible and functioning markets and the availability of credible financial institutions as potential collaborators.

The cash programme

The ECHO-funded programme was implemented between June and December 2008. It targeted 1,000 IDP and host community households in the slum areas of Nakuru Town. Implementation was facilitated through close collaboration with local community institutions and organisations, as well as the Ministry of Youth and Sport. Programme participants benefited individually or as pre-existing groups; others took the opportunity to organise new groups and open group accounts. A baseline survey was conducted after the targeting process was completed to assess the economic situation of targeted households, enabling later data comparisons. Beneficiary and community mobilisation ensured transparency and understanding of the programme and its conditions.

The programme team discussed plans for implementing the cash transfer component with Equity Bank of Kenya (EB), a local finance institution. Although various different transfer systems were considered, including direct distribution by ACF, Equity Bank was chosen because of the ease and accuracy of monitoring through the bank’s system, its transparency and accountability and the potential sustainability and longer-term impact encouraged by its micro-finance and savings policy. The security of agency staff was also a consideration. A joint ACF-US and Equity Bank team visited the slum programme areas to facilitate the opening of bank accounts for the 80% of targeted households that did not have them.

The money – €100 per beneficiary household – was transferred in two instalments: 20% for immediate needs and 80% intended to support livelihood recovery and investment. The bank, using a simple list of beneficiary names and matching bank account numbers, transferred the money within three hours. After the first disbursement, in October 2008, post-distribution monitoring assessed the extent of any misuse (spending on alcohol, drugs or prostitution, for instance), or failure to respect the programme’s rules and procedures. Based on the results, 114 households were expelled from the programme and replaced with new beneficiaries. All households, including the new ones, received the second disbursement, which was transferred in November 2008, four to five weeks after the first distribution. Meanwhile, beneficiaries were trained in business management, book-keeping and investment. A second round of post-distribution monitoring was conducted in December 2008 to determine household expenditure patterns and priorities, along with a internal evaluation of the programme as a whole.

Promising results

The two rounds of post-distribution monitoring revealed interesting and encouraging results, with the programme achieving all four of the objectives set out in the project proposal. Eighty percent of the beneficiaries were women. Spending priorities for both immediate and longer-term livelihood needs are detailed in Table 1.

Table 1 here

According to the post-distribution monitoring, 25% of households said that they spent the first instalment only on immediate needs, while nearly half (47%) used the cash for both immediate and longer-term needs. After the second distribution, all but 1% of households spent their cash on longer-term livelihoods investments; 3% of households saved some of the cash from the first distribution, and it is likely that the first round’s saving contributed to the second-round spending, hence the initial saving might be reflected in the later longer-term investment.

Graph1 here

Overall, 54% of households reported that they saved a portion of the transferred cash, with an average of €24 (2,412 KSh) saved per household. Around €12,000 of the €100,000 disbursed in total was saved. Reasons for saving included provision to meet future needs and investment and fear that the security situation could deteriorate again. It appears that having bank accounts – and thus a secure place to put money – encouraged people to save money. Sixty-seven per cent of saving households chose to put money into future provisions: 52% for future businesses, 11% for future spending and 4% for future investment. The high percentage of cash saved or allocated to longer-term investment suggests that even people emerging from crisis are not simply interested in meeting immediate needs, but are also planning for and willing to invest in the future. Albeit on a small scale, this cash transfer programme operated as a safety net in meeting needs as well as enabling people to prepare themselves in the event of future shocks.

All participants felt pleased that the programme had enabled them to participate in, and be recognised by, the formal banking system. The transparency of the programme modalities was appreciated, especially given the high levels of mistrust that persisted in the host community after the election violence. Despite the inherent security risks associated with working in urban slum areas, the programme succeeded in reaching its target households through the Equity Bank, whereas the direct distribution of cash or vouchers would have posed a much greater security risk to ACF-USA programme team and to beneficiaries, who would have had to keep the cash in their homes or shelters. Using cash – and a bank to transfer it – instead of having to purchase, transport, store and distribute goods also increased the cost-efficiency of the programme significantly.

Total programme costs per beneficiary amounted to €145.43 per participant, of which 68.76% (€100) was the cash transfer itself, and 31.24% support costs. The relatively high support costs (mainly on human resources) were necessary to ensure adequate mobilisation, monitoring and analysis of this first attempt at urban cash programming.

What did we learn?

The importance of mobilisation and monitoring in cash transfer programmes should be recognised, and sufficient human, logistical and financial resources should be allocated to ensure that these functions are done well. Getting to know the affected communities and interacting with them is essential to ensure that the intervention is appropriate, and that sufficient capacity is available to allow the programme to adapt to changing needs. Intensive monitoring has provided timely and accurate information on programme outcomes. Implementing this programme within a short time-frame (six months) was a challenge, as there was limited time for monitoring and training. More time should be allocated after the last distribution (at least six months) to ensure follow-up and support, as well as a return calculation and impact evaluation.

When a programme is implemented is as important as what the programme does. It was initially thought that the programme had started too late (six months after the initial violence) to respond to immediate needs and facilitate rehabilitation and the rapid recovery of livelihoods. However, the majority of programme participants confirmed that, had the programme started earlier than it did, they would have been unable to take full advantage of the opportunity it presented: many were still reeling from the initial shock of the violence and were not ready to think about and plan for the future. By August, when the targeting process started, people were ready to begin rebuilding their lives.

Conclusion: should there be a next time?

The Nakuru cash programme clearly demonstrates that it is possible to implement emergency cash transfer programmes even in densely populated and insecure urban areas. Working closely with local structures, in this case the Ministry of Youth and Sport and local CBOs, facilitated access to the host community and the affected population, and supported targeting and follow-up work. Close collaboration with Equity Bank could enhance the sustainability and continuity of activities through the provision of future access to micro-finance and credit, even after the ACF emergency programme finishes. The positive psychosocial impact of direct cash transfers, whereby families and individuals are able to decide their own priorities for spending and investment, should not be underestimated. Although the timeliness of livelihood rehabilitation responses by NGOs and donors is important, sooner is not always better. Allowing communities to identify the right point at which specific interventions should begin will improve effectiveness as well as sustainability. At the time of writing, ACF-USA was planning a follow-up evaluation after six months (in June 2009) to look at the economic return rate and the longer-term impact of the programme on targeted households.

The positive experience from Nakuru can be replicated in other contexts and could potentially make humanitarian assistance more participatory, empowering, cost-efficient and sustainable. The wider application of direct cash transfer programmes will need changes in donor policies and in the capacities of NGOs and local financial institutions. ACF-USA is implementing a similar direct cash transfer programme in rural areas of Northern Uganda, supporting the return of internally displaced people. Lessons learned from this programme will also be shared with the wider food security and livelihoods community in due course.


Silke Pietzsch is the Food Security and Livelihood Advisor for ACF-USA, covering Kenya, Uganda and South Sudan. Her e-mail address is Thanks to Mark Henderson, ACF programme manager for the Nakuru cash programme, the ACF Nakuru team, Sarah Nyathira of the Ministry of Youth and Sport and the Equity Bank team in Nakuru.


References and further reading

Lesley Adams and Paul Harvey, Learning from Cash Responses to the Tsunami, Issue Paper 6: Monitoring and Evaluation (London: ODI, 2006),

Oxfam GB, Cash-Transfer Programming in Emergencies: A Practical Guide, 2006,

ACF Kenya, Rapid Assessment Following Kenyan Post Election Violence Nakuru, Rift Valley, Kenya, April 2008.

ACF Kenya, Direct Cash Transfer to Post Election Violence Affected Host Population Nakuru, South Rift Valley, Kenya, Internal Evaluation, December 2008.

ACFIN, Implementing Cash-based Interventions – A Guideline for Aid Workers, 2007.

ACFIN, Food Security & Livelihood Policy Paper, 2008,