IMPACT OF THE CASH FOR HERDER APPROACH
Two consecutive dzuds hit Mongolia between 1999 and 2001, and caused mass death of 11 million livestock and leaving 63’000 herders without livestock. This seriously undermined the welfare and food security of afflicted herding communities. Switzerland provided emergency relief to the worst affected aimags (provinces) of western Mongolia starting in 2001.
To overcome constraints of sparsely populated Mongolia, SDC applied the ‘Cash Transfer' approach. A one-time cash assistance of CHF 180-200 was distributed to 7,600 herder families, representing 30% of the severely affected herders in the target areas, between 2002 and 2006.
‘Cash for Herders’ proved to be highly efficient and effective as cash assistance reaching beneficiaries shortly after the initiation of the project, and directly deposited on the beneficiaries’ personal bank accounts. Overall, 90% of the CHF 2.2 million project funds went to the beneficiaries; only 10% was spent on administration, implementation and monitoring.
With the 'Cash Transfer' approach, the relief provider entrust beneficiaries the choice on defining their most pressing needs and the decision on how to meet this need. It is empowering the individuals to continue to take responsibility for their future.
Evaluations of the four cash projects show that in the average recipients used 70% of their grant money to buy livestock for restocking purposes, and the remaining 30% for purchasing food, clothing, medicine, and to repay debts. The one-time cash assistance was also used to diversify family income by starting small businesses instead of continuing herding.
In Mongolia the ‘Cash for Herders’ projects had a significant advantage over in-kind commodity distributions, as they delivered the cash to vulnerable families within a local economic structure. Cash recipients spent more than 90% of their money within a month locally boosting the local economy.
An international workshop on 'Cash Transfers' was organized in Mongolia in 2007 in order to learn from the experience of social cash transfers and further strengthen cash transfer schemes in Mongolia.