CASH IN ARMED CONFLICT

WHY CASH REMAINS THE OPTIMAL SOLUTION AS CONFLICT

ESCALATES - A FEASIBILITY ASSESSMENT OF CASH ASSISTANCE
IN LEBANON

October 2024
WHY CASH?

Mercy Corps applies a cash-first policy, whereby if CVA is feasible and appropriate, Mercy Corps
considers it a primary response modality. Why so?

Restores Dignity
Cash empowers individuals to make their own decisions, allowing them to prioritize their
unique needs in environments where options are often scarce.

Cost-Effective
By cutting out logistics like warehousing, transport, and distribution, cash is the most efficient
way to deliver aid, maximizing the use of resources.

Provides Flexibility
Recipients can address their most pressing needs, which prevents duplication of efforts and
ensures the assistance is as effective as possible.

Supports Local Markets

Cash bolsters local economies by enabling people to buy from nearby traders, sustaining
market activity and fostering community acceptance.

MERCY CORPS Cash in Armed Conflict 2

Acknowledgements

This report explores the extent to which cash and voucher assistance remains a feasible response
modality to meet the basic needs of the displaced population in Lebanon following the escalation
of hostilities in September 2024. Data collection for this report was carried out between 9-18
October 2024.

The author would like to thank the Mercy Corps team for their valuable input in the assessment
design and interpretation of findings. Particular thanks go to: Sandy Malak, Amy Joce, Malik
Abou-Daya, Laila Al Amine, Josiane Saba.

The author would like to thank the daily workers that took part in the household survey data
collection over the phone. The author would like to thank Mercy Corps staff that supported data
collection with financial service providers: Khaled Ramadan and Marie Atiyeh.

Andrea Kajakdjian copy-edited this report.

The author would like to thank the members of Lebanese communities that gave their time to
share insights on their experiences at difficult historical times.

The author of this report is Chiara Genovese.

MERCY CORPS Cash in Armed Conflict 3

Executive Summary
Since September 2024, the escalation of hostilities between Israel and Hezbollah has caused the
displacement of over 1 million people and large humanitarian suffering in Lebanon. The
humanitarian response has prioritized distributing in-kind assistance to displaced populations in
collective shelters, while the response for those outside collective shelters is still under
development. The Flash Appeal response strategy recommends a "cash-first" approach,
advocating for the use of cash assistance whenever feasible and appropriate.

This report presents the findings of a rapid feasibility assessment of cash assistance conducted
by Mercy Corps in October 2024. Using the cash and voucher assistance pre-conditions
framework, it evaluates the feasibility of cash assistance as a response modality to meet the basic
needs of displaced populations living outside collective shelters in Lebanon. The assessment
employed primary data from a household survey conducted with affected populations in the
Bekaa Valley and southern Lebanon, as well as key informant interviews with financial service
providers. Secondary data, including redemption data and a desk review of existing
programmatic and policy literature, were also used.

The assessment concludes that cash remains a feasible and needed modality of assistance for
displaced populations living outside collective shelters. While disruptions occurred at the onset
of the crisis, markets for basic goods have shown rapid recovery. Hoarding behaviors (i.e.,
stockpiling items) may partly explain the increase in prices for some basic goods, such as pulses
and cereals. Affected populations in areas hit by airstrikes experience delays in redeeming cash
assistance but still prefer it over in-kind assistance due to its flexibility. The primary barrier to
scaling up the cash response is the absence of a reliable and secure identification and registration
platform.

Background and context

The hostilities between Hezbollah and Israel that have engulfed Lebanon since the start of the
war in Gaza on 7 October 2023 have escalated into a full-scale conflict in September 2024. While
the impact was initially limited to the southern governorates, the escalation of hostilities has
caused mass displacement throughout the national territory. The Government of Lebanon
estimates that the conflict has resulted in 2,169 deaths and over one million internally displaced
persons (IDPs)1. As of 17 October 2024, 190,882 IDPs live in 1,096 collective shelters and the
remaining IDPs live in host communities2. As of 28 September 2024, 25 water facilities are
reported damaged, affecting nearly 300,000 people, and 37 health facilities are closed across the
country. Most of the 795 buildings used as collective centers are schools or educational facilities,
affecting students’ access to education3. This is against the backdrop of a multi-pronged crisis,
which is also one of the three most severe financial and economic crisis globally since the mid-
19th century, that has engulfed Lebanon since October 20194. Based on a household survey

1
Based on estimations using dats from the previous conflict between Israel and Hezboallah in 2006.
2
Source: UN OCHA, Lebanon: Flash Update #36, 17 October 2024
3
Source: OCHA, Flash Appeal: Lebanon, October - December 2024, (October 2024)
4
Source, World Bank, “Lebanon Economic Monitor, Spring 2021: Lebanon Sinking (to the Top 3)”, (May 2021)

MERCY CORPS Cash in Armed Conflict 4

covering the five governorates of Akkar, Beirut, Bekaa, North Lebanon and most of Mount
Lebanon, poverty had more than tripled in the previous decade, reaching 44 per cent in 20225.

In the initial phase of the emergency, the response focused on meeting the basic needs of
internally displaced persons (IDPs) in collective shelters through in-kind assistance. This included
distributing core relief items (CRIs), such as mattresses, blankets, and pillows, as well as food,
including hot meals and ready-to-eat meals, and shelter assistance. The decision to provide in-
kind assistance in collective shelters was guided by conflict sensitivity considerations.
Distributing cash assistance in these settings could have created a pull effect, potentially
attracting more IDPs to the shelters and overwhelming the response capacity.

“The response to IDPs, particularly Lebanese, living outside collective

shelters remains limited”
The Flash Appeal recommends the use of cash assistance wherever, and whenever it is feasible
and appropriate.6 This is reflected in the activities proposed by the food security, basic
assistance, protection and shelter sectors in the first phase of the crisis. For IDPs living outside
collective shelters, the Food Security and Agriculture Cluster (FSAC) recommended monthly food
parcels or cash for food (USD 25 per person per month up to a maximum of 6 persons) as part of
emergency response interventions, while the Basic Assistance Working Group (BAWG)
recommended multi-purpose cash (MPCA) (USD 100 per household per month)7The transfer
values have been calibrated using the economic capacity to meet essential needs (ECMEN)
methodology and are regularly revised to remain in line with the survival minimum expenditure
basket (SMEB).

5
Source: World Bank, “Lebanon Poverty and Equity Assessment 2024: Weathering a Protracted Crisis”, (May 2024)
6
Source: OCHA, Flash Appeal: Lebanon, October - December 2024, (October 2024)
7
Source: FSAS, Sitrep#12 - FSA Sector - Lebanon Emergency Response (6 October 2024). Cash for Food is an unrestricted and unconditional
cash intervention. For specific guidance on the cash for food modality in the context of the emergency response, see Food Assistance Response
guidelines July 2024

MERCY CORPS Cash in Armed Conflict 5

Some of the existing large-scale cash and voucher (CVA) programs have introduced shock-
responsive measures to reach vulnerable populations. For example, UNHCR and WFP scaled up
their CVA programs for Syrian refugees to increase the number of refugee families reached
(horizontal scaleup) using pre-existing registration and vulnerability data8. WFP, in collaboration
with the Ministry of Social Affairs (MOSA) and using social safety net (NPTP/ESSN) lists, provided
emergency cash assistance to 45,700 Lebanese affected by the ongoing conflict, mainly in seven
of the most affected districts in southern Lebanon9. In partnership with MOSA, the ILO and
UNICEF have distributed a USD 100 emergency one-off payment to 5,000 existing beneficiaries
of the National Disability Allowance program from affected areas (vertical scaleup), in addition to
accelerating the disbursement of regular monthly payments to all beneficiaries10. However,
scaling up other existing CVA programs and introducing new ones to meet the scale of unmet
needs remains limited. While the acceptance and use of CVA has grown exponentially in the last
10 years (CVA accounted for 21 percent of global humanitarian funding in 2022), skepticism about
its feasibility persists, especially in fragile contexts. By prioritizing in-kind aid, humanitarian
donors and responders limit the effectiveness of the response and risk undermining the local
markets on which people rely to cope with the crisis11.

Mercy Corps has a cash-first policy, meaning that where CVA is feasible and appropriate for
a program, Mercy Corps will consider it as the primary response modality.

In Lebanon, the ECHO-funded Services and Assistance for Enabling Recovery” (SAFER) program,
aims to help vulnerable Lebanese families in the Bekaa Valley meet their basic needs12. Between
August 2024 and July 2025, a total of 2,388 vulnerable Lebanese households will receive monthly
transfers of multi-purpose cash assistance (MPCA) for twelve months to help them meet their
food and non-food needs13. Program participants can redeem their assistance at any branch of
the national network of the financial service provider (FSP) BoB Finance - a money transfer
operator14.

In October, SAFER activated the crisis modifier to provide an emergency top-up cash transfer to
existing program participants (vertical scaleup) in areas affected by airstrikes, namely Iaat,
Maqneh and Baalbek15. The remaining villages in the SAFER area of intervention (Arsal and
Fekeha) are considered safe.

This assessment aims to shed light on the extent to which the conditions for a CVA response
are still met in Lebanon. It seeks to answer the question: does CVA remain a feasible response
modality for IDPs living outside collected shelters, following the escalation of hostilities Lebanon?
It does so by triangulating existing data (such as WFP market monitoring) with primary data,

8
Source: BAWG email, Message from UNHCR and WFP: Temporary Expansion of Cash Assistance for Refugees, 8 October
9
Source: WFP, Emergency Response: Situation Report 3, 10 October 2024
10
Source: ILO, “ILO and partners take shock-response measures to support persons with disabilities in Lebanon”, (8 October 2024)
11
See for example, the Cash Consortium of Sudan, ”From Feasible to Life-Saving: The urgent case for cash at scale in Sudan”, (April 2024)
12
SAFER area of intervention includes the following five villages: Fekha, Maqneh, Iaat, Arsaal and Baalbek (Sheikh Habib, Al-Asira, Nabi Inam, Al-
Solh neighborhoods).
13
SAFER aligns with the transfer values of national social safety nets. Program participants receive USD 20 per person (up to a maximum of 6)
for food needs and USD 25 per household for non-food needs per month. An additional USD 5 is added to cover transportation costs to the FSP
outlet and round up the amount to the nearest tenth and reduce the need for small denomination banknotes. Overall, this means that: a family
of 1 receives USD 50 per month, a family of 2 receives USD 70 per month, a family of 3 receives USD 90 per month, a family of 4 receives USD 110
per month, a family of 5 receives USD 130 per month, families of 6 or more receive USD 150 per month
14
In addition to BoB Finance, Mercy Corps has a service agreement with OMT as a back-up option.
15
Iaat was targeted by Israeli airstrikes on 27 September 2024. The outskirts of Baalabek city were targeted by airstrikes multiple times on 23, 25,
27, 29, 30 September.

MERCY CORPS Cash in Armed Conflict 6

where gaps exist (for example, on the functionality and access of financial service providers).
Given the urgency and scale of the unmet needs of IDPs living outside collective shelters, this
report aims to provide a rapid and timely analysis of the feasibility of CVA to inform decision-
making in the early phase of the crisis. It is expected that the analysis will be further updated in
the future as other data collection and analysis initiatives provide more evidence. The report aims
to provide conceptual underpinning and recommendations for strengthening Mercy Corps’ CVA
programming in the current context in Lebanon. It also aims to provide insights into the extent
to which CVA remains a viable response modality in Lebanon, which can inform the modality
response by other aid agencies and policymakers’ preferred response modalities and donors’
funding decisions.

Conceptual Framework
In line with the CALP program quality toolbox, the choice of response modality should be
preceded by a sound situation and response analysis16. Where enabling conditions are not in
place, CVA runs the risk of undermining markets and hampering long-term recovery, exposing
affected populations to protection risks and providing poor value for money for donors’
contribution. This feasibility assessment aims to inform the “go-no go” decision on CVA
programming for the response analysis in the context of the escalation of hostilities in Lebanon.

There are several tools available for assessing cash feasibility17. The analysis in this report is based
on the Mercy Corps and CALP cash pre-conditions framework18. Although they may be grouped
into different categories, existing tools generally use the same principles to assess the feasibility
of CVA interventions. These are contextual conditions that must be in place for a CVA response
to be implemented.

The checklist identifies the following preconditions:

1. Market conditions: this includes market functionality, the extent to which supply meets
demand, items are locally available in the market and market accessibility i.e. financial,
physical and social access.
2. Community preference: this includes the extent to which cash is already being used by
the affected population, access to food or income for basic needs and that cash
distribution does not increase protection risks.
3. Operational conditions: this relates to the extent to which cash can be delivered safely
and effectively, functional and reliable payment systems are in place and programmatic
expertise and operational capacity are available.
4. Community and political acceptance of cash as an assistance modality.

The rest of the report reviews existing evidence and provides an assessment of the extent to
which the CVA preconditions are met in the context of the escalation of hostilities in Lebanon. It
concludes with a summary and discussion and recommendations.

16
Source: CALP Programme Quality Toolbox
17
For example, Cash Feasibility and Response Analysis Toolkit by UNHCR, the Cash and Voucher Assistance Feasibility Checklist by Catholic
Relief Services
18
For reference, see Cash Transfer Programming Toolkit by Mercy Corps and Pre-conditions list by CALP

MERCY CORPS Cash in Armed Conflict 7

Methodology
The assessment employed a mixed-methods approach comprising of qualitative and
quantitative data collection; informed by primary and secondary data. The primary data
collection was guided by a thorough desk review and consultations with humanitarian
coordination to avoid overlapping efforts. Data gaps identified relate to the operational
conditions (in particular the extent to which affected populations and FSPs continue to be able
to access and deliver CVA safely and reliably) and the affected populations’ preference for
response modality and program design.

Primary data included quantitative surveys with SAFER program participants, as well as South
area program participants and qualitative key informant interviews with FSPs head offices and
branches. The household survey focused on: access to FSP branches, expenditure patterns,
assistance preferences and impact of cash assistance on social cohesion.

A total of 289 households (127 from Bekaa and 162 from South) completed the survey. The surveys
were designed for different purposes in Bekaa and South, however both included the questions
used in this assessment. For the Bekaa, the sampling strategy was designed to achieve an equal
representation of the five villages where SAFER is implemented and to include program
participants who hadn’t been able to redeem their assistance. For the South, the households
were randomly selected from Mercy Corps Lebanon’s (MCL) non-cash program beneficiary lists.

The surveys were collected remotely between 11 and 18 October 2024 (see table below for more
details).

Village Sample
South
Preferred not to answer 4
Bent Jbeil 75
El Nabatieh 4
Marjaayoun 54
Saida 2
Sour 23
Bekaa
Aarsal 24
Baalbek 28
Fekehe 20
Iaat 25
Maqneh 30
Grand Total 289

Key informant interviews (KIIs) with FSPs were conducted by telephone and email between 9
and 14 October. The interviews focused on the FSPs’ existing capacities e.g. number of branches
and humanitarian or development cash assistance programs supported, challenges e.g.
operational status of branches, customer verification, banknote availability and replenishment,

MERCY CORPS Cash in Armed Conflict 8

and solutions. The KIIs were conducted with head office staff of the following FSPs: BoB Finance
(SAFER selected FSP), OMT and Million Bridges. BoB Finance operates one of the largest
networks of financial services with more than 800 locations across Lebanon and over 20 full-
fledged branches19. Eighteen BoB Finance branches in the Bekaa Valley were contacted, of which
5 took part in the interview20. The sample of BoB Finance branches was selected using a
purposive sampling approach to include branches in and around SAFER’s area of intervention.

FSP Number of completed KIIs

BoB Finance 5 outlets + head office

OMT Head office

Million Bridges Head office

A preliminary review of existing assessment initiatives informed the scope of this assessment, to
ensure that it builds on and complements, rather than duplicates, ongoing efforts21. The evidence
gathered through primary data collection was triangulated with an extensive desk review of
existing programmatic documents e.g. coordination meeting minutes, sector guidelines, the
flash appeal and situation reports, and policy papers e.g. national social protection strategy, press
releases, poverty and market assessments, plans to build social protection systems, including
national social registry. In addition, secondary data from the BoB Finance‘s platform was used to
triangulate the analysis of redemption patterns22.

Limitations
The analysis for the cash feasibility assessment is affected by the following limitations and
associated mitigation measures.

• Limited sample size:

The surveys and key informant interviews were conducted with small samples of SAFER program
participants in Bekaa and response program participants in the South, FSP headquarters staff
and shop owners. The samples are not representative of the national population. Airstrike-
affected areas in the Bekaa Valley were purposively selected as they are the areas where the
conditions for the feasibility of cash assistance are most likely to have changed since the
escalation of hostilities. Where possible, the results of the analysis have been triangulated with
existing large-scale assessments, in order to strengthen their validity.

• Mistrust of cold calling:

19
Source: BoB Finance website, accessed 16 October 2024
20
The geographical breakdown is as follows: Baalbek (1), Fekha (2), Deir El Ahmar (1) and Arsaal (1)
21
This included exchanges with the BAWG coordinator, and a review of the coordination meeting minutes
22
BOB Finance platform allows to monitor the status of transfers (paid or unpaid) daily for all SAFER program participants.

MERCY CORPS Cash in Armed Conflict 9

Given the security circumstances, affected communities are reluctant to provide information
about their personal circumstances over the phone to callers they don't know23. In particular, IDP
respondents didn’t want to give details of the locations they had moved to. As a mitigating
measure, data collectors were trained to take extra time at the beginning of the call to identify
themselves as part of the SAFER program. They did this by sharing details of the SAFER program
that only staff members would know, such as the date and place of registration for the SAFER
program.

Demographics
Of the Bekaa sample, 61 percent were living in their own homes and 37 percent were displaced.
Most of the IDPs were originally from Baalbek, Iaat and Maqneh, while only two IDP respondents
were originally from Arsaal and Fekha. Most (19) of the displaced respondents were hosted for
free with family and friends, 11 of the displaced respondents lived in a building that they owned,
10 of the displaced respondents lived in a rented shelter and two of the displaced respondents
lived in a collective shelter. The sample was equally split between female and male respondents
and included both participants that had redeemed their cash (84 percent) and those that had
not been able to (16 percent) to bet to better understand the barriers and challenges. In the South
sample, 97 percent of respondents were Lebanese displaced families, with 94 percent having
been displaced twice. The average household size was four, 84 percent of the respondents were
males, 41 percent had members with chronic diseases and 88 percent were unemployed. Most
participants moved to temporary rented apartments (36 percent), followed by family hosting (19
percent) and friend hosting (16 percent), while 12 percent were in collective shelters and 9 percent
in fee-free apartments.

Market conditions
Main findings: Although markets in a few border areas remain dysfunctional due to ongoing
insecurity, markets in other districts experience short-term security shocks and quickly
return to normal functioning. Price levels have increased nationally, especially for basic
supplies such as cereals and pulses (including bread, sugar, rice and flour).

23
For example, some survey respondents said:” I don’t trust you. How can I know you are not a spy?”

MERCY CORPS Cash in Armed Conflict 10

Since the onset of the economic and financial crisis in Lebanon in October 2019, WFP has
conducted regular market monitoring of markets for various essential commodities, including
food, fuel and medicine. WFP’s market monitoring data, along with other data sources, such as
the annual Vulnerability Assessment for Syrian refugees and UNHCR outcome monitoring,
inform the monthly estimate of the survival minimum expenditure basket (SMEB); the monetary
estimate of what a Syrian refugee family of five members needs in Lebanon to survive on a
monthly basis. With the escalation of the hostilities in Lebanon, WFP has increased the frequency
of its market monitoring activities and conducted rapid weekly (previously monthly) monitoring
of key market functionality and access indicators at the district level24

Following closures at the beginning of the escalation of hostilities, the operational status of WFP-
contracted shops improved in Baalbek-El Hermel (75 per cent of shops), Bekaa (86 per cent of
shops) and South (44 per cent of shops), while the operational status of WFP-contracted shops
continued to deteriorate in Nabatieh and the southern suburbs of Beirut, where 82 and 69 per
cent of shops remained closed by October 17, respectively25. Markets in hard-to-reach areas in the
southern border areas are reported to be completely dysfunctional and inaccessible. In these
areas, WFP and UNICEF have conducted joint convoys (18 trucks) to deliver food items, water and
hygiene supplies respectively26.

By October 17, nearly all WFP-contracted shops reported price increases across all districts, with
Beirut, Baalbek-Hermel, Mount Lebanon and the southern suburbs of Beirut seeing significant
spikes27. The cost of the food component of the SMEB increased from USD 36.2 in week 2 of
September to USD 37.4 in week 2 of October, a 3.2 percent increase; cereals and pulses, including
bread, were the main drivers of the increase in the food basket cost28. Although a high number
of WFP-contracted shops had reported a low level of stocks in the initial phase of the crisis,
notable improvements in stock availability were seen by week 1 of October. This is supported by
evidence from the survey respondents. Ninety-two percent of survey respondents in Bekaa said
prices have increased in the markets since the escalation of hostilities. The most frequently
reported items by survey respondents for which prices had increased were oil, rice, sugar, flour,
and bread.

More than half of the survey respondents reported One 31-year-old female
no difficulties in accessing the markets. A higher respondent from Arsaal said: “The
number of IDP survey respondents (31.9 percent) security situation in my area is
faced challenges accessing the markets compared safe, so I did not face any
to non-IDP respondents (22.8 percent). problems".

A 43-year-old male respondent Most of the respondents that reported difficulties

from Iaat said: “At first the mentioned the security situation on the roads and at the
neighboring shops did not markets as the reason.
open but now they open every
hour or two”.

24
The sample used in the WFP rapid market monitoring is not statistically significant. However, it provides an important refere nce point in the
absence of other high-frequency representative market assessments.
25
Source: WFP Market monitoring, data shared at the Food Security and Agriculture Cluster on 18 October
26
Source: WFP, Emergency Response: Situation Report 3, 10 October 2024
27
Source: WFP, Rapid situation analysis, 14 October 2024
28
Source: WFP, Rapid Situation Analysis, 14 October

MERCY CORPS Cash in Armed Conflict 11

Evidence from previous crisis provides an indication on the resilience of markets for goods and
services in Lebanon. Following the Beirut port blast in August 2020, the emergency market
mapping and assessment (EMMA) for four shelter items concluded that markets continued to
function well and recommended market-based programming (such as CVA) as a response
modality29 The evidence from the supply shocks following
A 31-year-old IDP female
the gradual phase out of the national subsidy programs
respondent from Maqneh said:”
in 2021 in Lebanon shows that the markets for basic items
In these circumstances, most
(including fuel, medicines and wheat) remained elastic
shops are closed”.
and able to adapt quickly30.

Affected population needs and

preferences
Main findings: Affected populations report buying supplies (flour, rice, oil, sugar, canned
food) in stock, to prepare for the crisis. Cash recipients use the assistance to help others, by
hosting IDP families or giving them food and other in-kind items. Affected populations
continue to prefer monthly cash transfers instead of in-kind assistance, as it provides
flexibility and choice, especially in the face of displacement.

The situation analysis conducted for the Flash Appeal shows that 1 million people are in need of
basic assistance, food security and agriculture, health, protection, shelter, site management and
coordination, social stability, and water, sanitation and hygiene (WASH)31. Efforts are ongoing to
assess the multi-sectorial needs of the displaced populations living in collective shelters and host
communities. The Emergency Rapid Need Assessment (ERNA) is a multi-sectoral assessment of
the displaced population in collective shelters32. For IDPs living within host communities, REACH
has launched a Displacement Impact and Rapid Needs Assessment (DIRNA) that aims to assess
access to essential services33. These large-scale, inter-agency assessments will provide detailed
evidence on unmet needs at a high granular level (by population group, district and specific
vulnerabilities).

The analysis of the survey data shows that sixty percent of respondents in Bekaa changed their
expenditure patterns since the escalation of hostilities. Of these, 88 percent of respondents
bought emergency supplies in stock. Among them, the most commonly cited items were flour,
rice, sugar, oil and canned food, A 34-year-old man said: “We bought a quantity of food and
stored it, fearing war and losing [access to] food”. An 80-year-old IDP woman said: “We bought
shelter supplies because we left the area without anything”. Changes in purchasing habits, after
September 23, 2024, were evident for South participants as well, with 56% of respondents
reporting alterations since the conflict escalation, predominantly leaning towards decreased
purchasing (47%). This shift may reflect economic constraints and the psychological impact of

29
Source: Caritas Switzerland, ”Relying on Markets for Beirut Blast Shelter Response”, (September 2020)
30
For example, in August 2021, following the phase out of the subsidy program by the government, fuels and medicines became scarce. Large
queues at petrol stations formed and the government power plants reduce electricity supply to a few hours per day. After one month, petrol
stations were able to supply fuel although at much higher market prices to those who could afford them.
31
Source: OCHA, Flash Appeal: Lebanon, October - December 2024, (October 2024)
32
Source: Inter-Agency, ESCALATION: Coordination, Response Reporting, and Emergency Rapid Needs Assessment (ERNA) email, 26 September
2024
33
Source: Inter-Agency, LRP Partners Update Meeting, 11 October 2024

MERCY CORPS Cash in Armed Conflict 12

the ongoing situation, emphasizing the need for continued cash assistance to stabilize
household economies.

* Prioritizing emergency supplies like food, water, and first aid

Twenty percent of Bekaa respondents said they used cash assistance to help others in need. Of
these, 16 respondents said they host IDP children, five respondents said they helped in other ways
(hosting IDP families, giving food and other items to IDPs), four respondents said they gave or
lent money to IDPs and two respondents said they paid for the relocation costs of IDPs. A 67-
year-old female respondent said: “I can't share the cash assistance with others because the
amount is not enough for me but I host someone in my house now we eat together”. The large
majority of those who helped others are not displaced and live in their homes. However, one 34-
year-old displaced man who is currently living in a place with insecure tenure said: “I gave a small
amount of USD 25 to one of my relatives, he is displaced and lives with me in the same house”.
The large majority of respondents said they didn’t share the assistance with anyone else. A 31-
year-old female respondent living in her own home said: “It wasn't enough for us so I couldn't
help anyone”. A 26-year-old male respondent living in his own home said: “My situation is difficult,
so I couldn't [help others]”.

For the Bekaa findings, the large majority (96 percent) of survey respondents said they prefer to
continue to receive cash, rather than in-kind, assistance. Among the non-displaced, the reasons
for preferring cash assistance revolve around dignity and flexibility. One 34-year-old survey
respondent from Arsaal said: “Cash is better to buy the items I need in the quantity I require to
save remaining money”. One 29-year-old male respondent from Iaat said: “I prefer cash
assistance because I can move and get my priorities better.” One 67-year-old female respondent
from Iaat said: “I like to buy what I want”. One 44-year-old male respondent from Baalbek said: “I
prefer cash because I am budgeting to meet basic needs". Among the displaced, the reasons for
preferring cash assistance also include ease of transportation. One 68-year-old male respondent
from Fekha said: “I prefer cash assistance to bring the items we need, as there are things we
may not use in in-kind assistance”. One 45-year-old male IDP respondent from Iaat said: “Most
people left their homes and everything behind; that's why I prefer cash”. Among those who
preferred a bit less cash and more in-kind support, the reasons include being able to help others
and concerns about market functionality.

MERCY CORPS Cash in Armed Conflict 13

One 67-year-old female respondent from Arsaal said: “I prefer less cash and more in-kind
assistance to help the displaced who live with me”. One 47-year-old IDP female respondent
originally from Iaat said: “Given the difficult circumstances, there are food items unavailable in
the market”.

Similarly, for the South findings, the overwhelming preference for receiving assistance in USD
(97%) and as cash-only (86%) further affirms that cash is viewed as the most effective modality.
This preference indicates that respondents value the purchasing power and flexibility that cash
assistance provides, allowing them to respond to their immediate needs without restrictions. “I
would be able to buy the urgent items (like medicines, diapers, milk etc.) my family need
without restriction!” said most of the Lebanese respondents. On the other hand, those who
responded by the need of in-kind preferred receiving food, winterization and bedding items. The
safety concerns expressed by respondents reveal a nuanced reality; while 64% felt mostly safe
when traveling to receive assistance, there remains a notable percentage (28%) who felt
completely secure. This indicates that while cash assistance is perceived positively, further
monitoring of the security situation is essential.

The findings from South reveal that participants highly value the flexibility that cash assistance
provides in meeting their specific needs, with 91% believing that essential items would be readily
available for immediate purchase (Figure 2). Additionally, community tension related to cash
assistance programs appears low, as 86% of respondents indicated they do not anticipate any
negative impacts (Figure 2). The data also shows that 90% of respondents were able to access
markets without issue since the conflict escalation on September 23, 2024, and 94% confirmed
they could travel to markets without difficulty (Figure 2). However, perceptions of safety while
shopping are mixed: 41% of respondents often felt confident doing so, while 44% sometimes felt
confident, indicating that insecurity still affects shopping behavior (Figure 3). Interestingly, only
17% of respondents reported stocking food due to concerns about potential sieges or supply
shortages (Figure 2). This relatively low percentage suggests that, while some individuals are
preparing for uncertainty, the majority feel secure in their current access to food and supplies.

91% 86% 90%

79%

17% 44% 41%

6%3% 11% 7%
3% 3% 3%

Items availability Community Lack of access Stocking food 9%

tensions to items due to 2% 2% 1%
groceries/market concerns over a
(after 23 potential siege
September)

Yes No Unsure No reponse

Figure 2: General findings on cash assistance Figure 1: Perception on shopping without fear

When asked about their preferred frequency to receive cash assistance from SAFER, 95.7 percent
of Bekaa survey respondents said they preferred to receive monthly transfers, 2.6 percent of

MERCY CORPS Cash in Armed Conflict 14

survey respondents said they preferred to receive double amount every two months, 1.7 percent
of survey respondents said they preferred to receive triple amount every three months. Among
those who preferred monthly frequency, one 52-year-old male respondent from Maqneh said:
“Monthly frequency is better because due to the risk of running out of money” and a 47-year-old
male survey respondent from Iaat said: “I prefer monthly frequency [single amount] because I
know that at the end of the month, a payment comes to buy food and medicines that I must
get every month”. Among those who preferred to receive assistance every two (double amount)
or three months (triple amount), one 50-year old female survey respondent from Fekha said: “I
prefer bi-monthly frequency [double amount] to go withdraw assistance only once” and a 60-
year-old female IDP respondent originally from Iaat said: “I prefer bi-monthly frequency [double
amount] because we need to buy diesel and winter clothes”.

Operational conditions
Main findings: Money transfer operators, especially those in airstrike-affected areas, have
closed due to the security conditions. It takes a higher number of days to redeem assistance,
however the large majority of program participants have done so within 14 days. The lack of
an identification and registration platform places a significant obstacle to the expansion of
the CVA response to meet existing needs.

Survey respondents from safer areas made fewer attempts on average to redeem their
assistance (1.5 attempts each in Arsaal and Fekha) compared to those from airstrike-affected
areas (3 attempts in Baalbek, 1.9 in Iaat, and 2.1 in Maqneh). Similarly, respondents from safer areas
visited fewer FSP outlets on average (1.1 outlets in Arsaal and 1.2 in Fekha) than those from
airstrike-affected areas (1.8 outlets in Baalbek and Maqneh, and 1.4 in Iaat). Nearly half (44.1
percent) of the respondents reported facing difficulties redeeming their assistance. Among those
who encountered challenges, 30.4 percent said BoB Finance outlets were closed, 30.4 percent
were unable to travel to the outlet due to the security situation, 21.4 percent lacked
transportation, 16.1 percent found the outlet overcrowded, 12.5 percent reported a lack of USD
banknotes, 7.1 percent had issues with their IDs, 7.1 percent hadn’t received the payment SMS, 7.1
percent cited other reasons (e.g., damaged SIM card), and 5.4 percent delayed redemption due
to other priorities.

The issue of overcrowding (mentioned by 16.1 percent of survey respondents) is related to the
extra layers of identification for Lebanese recipients, while Syrian refugees who receive cash
assistance by the UN agencies can redeem it using their Red Card only34. An interviewed BoB
Finance outlet manager in Baalbek said: “the assistance redemption process for Lebanese
involves checking the transaction number, verifying and tacking a photocopy of the ID. This
takes more time than the process for Syrian refugees, who use the Red Card”. The ID-related
issues (mentioned by 7.1 percent of survey respondents) include issues with registration and
third-party authorization. When a SAFER program participant (usually the household head) is
unable to go to the BoB Finance outlet, they can delegate a third party (usually another family
member) to redeem assistance on their behalf. However, the process can be challenging,

34
The Lebanon One Unified Inter-Organizational System for E-cards (LOUISE) is a harmoinzed platform to deliver CVA to refugees in Lebanon.
LOUISE program participants can redeem their assistance using the Red Card, an e-card that can be used to redeem cash assistance from any
of the Banque-Libano Francais ATMs or contracted BoB Finance outlets or to buy goods in any shop with a POS system.

MERCY CORPS Cash in Armed Conflict 15

because it involves multiple stakeholders: the program
A BoB Finance outlet manager in
participants and their family members, the program
Baalbek said: “People are coming
team and the financial service provider. A 50-year-old
to collect payments on behalf of
male IDP survey respondent originally from Maqneh
their family members, particularly
said:” The BOB finance branch wants my mother
when the head of household is
personally to give them assistance. My mother is elderly
elderly, without obtaining a proxy
and very sick, and the situation is war and I do not have
authorization”.
a car. I hope that the request will be transferred to my
name”. A 70-year-old female survey respondent from
Fekha said:” The assistance is in my husband’s name. I went to get aid and then returned and
brought my husband's ID to get aid. Two BoB Finance outlet managers interviewed said they
faced challenges with processing the request for program participants who send other family
members to redeem.

In the most
severe cases, the challenges faced with redemption meant that program participants had not
been able to redeem the assistance. Analysis of the redemption data shows that, while the large
majority (91 percent) of program participants used to redeem their regular cash transfer within
seven days before the escalation of hostilities, only two thirds (68 percent) had been able to
redeem their emergency top-up transfer within seven days after the escalation of hostilities35.
However, the large majority (90 percent) of program participants had been able to redeem
assistance 14 days after the escalation of hostilities, indicating that the redemption curve has
flattened. A 65-year-old IDP female respondent originally from Iaat said: ”I haven’t been able to
withdraw the assistance yet. I am sick and cannot walk and I moved to a new area, I did not
find the BOB office [in the area of displacement] yet”. A 75-year-old IDP male respondent
originally from Baalbek said: ”I couldn't get the money since there is no money available at BoB

35
To avoid overcrowding at the FSP outlet, SAFER distributes assistance in five batches a few days apart. The most recent regular transfers were
made on 18, 20, 23, 25 and 26 September respectively. In addition, program participants in Baalbek, Iaat and Maqneh received the emergency
top-up transfer on 8 October. Redemption patterns are calculated counting workdays from the day of transfer (Day 0). Redemption patterns
before the escalation are calculated using data for the regular transfer in September. Redemption patterns after escalation are calculated using
data for the emergency top-up transfer in October.

MERCY CORPS Cash in Armed Conflict 16

Finance, people are telling me to go to Zahle area to get but I am afraid of the road because of
the war”. A 77-year-old IDP male respondent originally from Maqneh said: ”The only problem is
the money withdrawal center is far away. There is no cash withdrawal center near me because
of the situation”.

Out of 18 BoB Finance outlets contacted for this assessment in and around SAFER area of
intervention, 13 were closed or did not respond. Of these, the managers at four outlets in Baalbek
said they were not planning to re-open soon because their store is in an at-risk area. The manager
of one outlet in Baalbek said the shop is close to airstrike-affected area and he cannot ensure the
safety of customers, including SAFER program participants. The managers of two outlets in
Arsaal and Al Ain said they were currently afraid to reach their shops due to safety situation of
the road, however they were monitoring the situation and considering re-open the following
week if safety improved. The manager of an outlet in Younine said he had to close the shop
because he is unable to safely reach the bank to replenish the stock of banknotes for the shop,
however he would be willing to re-open the shop if BoB Finance brings the banknotes to his
shop. Three outlets were unreachable over multiple days of data collection.

All five BoB Finance outlets interviewed reported that they had been supporting cash assistance
programs prior to the escalation of hostilities. These programs include both humanitarian efforts,
such as the SAFER program by Mercy Corps, and development initiatives, such as the social safety
net assistance by MOSA, targeting both refugees and Lebanese beneficiaries.

The outlets in Arsaal (around 6,000) and Baalbek (around 3,000) serve a higher number of people
per month compared to two outlets in Fekha (200 and 300 respectively). The manager of the
outlet in Deir El-Ahmar said: “The number of people changes every month due to the situation.
Even people from outside the village are coming to this outlet in addition to displaced people to
the area”. The outlet managers interviewed were asked about the difficulties they face and
solutions they put in place to solve them. The outlet manager in Arsal said he is facing difficulties

MERCY CORPS Cash in Armed Conflict 17

replenishing the stock of banknotes in USD 20 and USD 50 denominations. He is solving the issue
by obtaining the notes from a money changer, rather than the bank. Two outlet managers
interviewed said they are incurring higher operating costs. One of them said: “The cost of
transferring money from the bank to Arsal has increased due to the current situation.
Transporting the money from the bank to Arsal has become costly because of the dangers and
risky situation of the roads following the escalation”. Both outlet managers said they cannot put
in place any solution to the higher operating costs. One of them said: “There is no solution. I was
previously under M3, which transferred money directly to the shop without needing to go to the
bank, but this has now stopped”36. The other said: “There is no solution. The situation of the
people is hard, and we cannot increase the cost on them”.

BoB BoB BoB BoB BoB

Finance Finance Finance Finance Finance
outlet in outlet in outlet in outlet in outlet in
Arsaal Fekha Fekha Deir El- Baalbek
Ahmar

Are any of your Yes Yes Yes Yes Yes

customers receiving
cash assistance from
any humanitarian or
government agency?

If so, who are the Mercy Corps, Mercy Mercy Mercy Mercy
agencies? Red Card, Corps Corps, Corps, Red Corps,
MOSA Himaya, Card, LOST LOST, IRC
DRC

How many transfers Around Around Around It depends Around

(number of people 6,000 200 300 3,000
assisted) do you make
per month for each of
those programs?

The lack of an identification and registration platform of IDPs poses a critical hurdle to the
expansion of the CVA response. A reliable platform that allows to identify IDPs, share data in a
safe manner and track assistance is critical for targeting and deduplication. Existing cash
programs have adopted ad-hoc solutions such as vertical and (where previous registration lists
existed) horizontal expansion. However, the crisis is likely to have impacted the population

36
M3 delivers banknotes to contracted BoB Finance outlets. This removes the need for BoB Finance outlet managers to visit banks to replenish
their banknote stock.

MERCY CORPS Cash in Armed Conflict 18

groups differently. OCHA and the Lebanese Red Cross are working with the Government of
Lebanon and the Disaster Risk Management unity to propose documented standard operating
procedures for registration37. Considerations around the inter-operability of the system with
existing databases (such as the DAEM database that supports the national social safety net, the
Emergency Social Safety Net, ESSN), that will be critical in the long-term when transitioning the
response from the emergency to recovery, are marginally present in the coordination
discussions.

Community and political acceptance of

cash
Cash and voucher assistance has long been accepted as a response modality in Lebanon.
Following the start of the Syrian refugee crisis, WFP began providing paper vouchers for food in
2012, introducing electronic vouchers in late 2013, using a card system established with the
Banque Libano-Francaise. In August 2014, UNHCR and the Lebanon Cash Consortium,
comprising six international NGOs, began distributing multipurpose cash assistance for non-
food basic needs38. Since 2014, WFP has been supporting the food assistance component of the
National Poverty Targeting Program (NPTP), a social safety net, through e-cards. Due to the
worsening economic crisis, an unconditional cash top-up was introduced in May 2021 to help
assisted families cover other basic or non-food needs. Since September 2021, NPTP assistance
became unrestricted and can be redeemed at ATMs in USD or at contracted shops39. Since the
escalation of hostilities, sector guidance has been against the use of CVA to assist IDPs inside
collective shelters. The decision was made based on the risk for pull effect to collective shelters,
which would overwhelm their capacity to respond. However, CVA is the recommended modality
of assistance for IDPs outside collective shelters, where markets are functioning.

Conclusions and discussion

This feasibility assessment shows that a CVA response is currently needed and feasible to
help meet the basic needs of IDPs living in host communities in most parts of Lebanon.

Although the markets for basic goods and services have experienced disruptions following
airstrikes, these seem to be temporary, with shops opening shortly afterwards. Hoarding
behavior, i.e. the process of buying emergency items in stock in preparation of a shock, could
have contributed to the low levels of stocks reported by shops in some parts of Lebanon. In the
southern border areas, markets remain completely dysfunctional, with shops being closed and
significant disruptions to the supply chain. In these areas, the distribution of in-kind assistance
using convoys remain necessary.

By using the cash assistance to buy emergency items in stock (such as bread, flour, rice, oil, and
sugar) in advance, affected populations in Lebanon reduced their exposure to risk (for example,

37
Source: OCHA, Minutes of the follow-up discussions on cash, 14 October 2024
38
Source: Bailey, S., Harvey, P. ”The DFID/ECHO approach to cash assistance for refugees in Lebanon”, (September 2017)
39
Source: WFP, ”National Poverty Targeting Programme & Institutional Capacity Strengthening”, (July 2022)

MERCY CORPS Cash in Armed Conflict 19

in case of market disruptions or security challenges to reach the markets) and mitigated the
impact of the shock, if it happens.

Community acceptance and affected CVA offers three distinct functions,

populations’ preference for the use CVA to known as the three "P" functions:
address basic needs is overwhelmingly positive,
indicating a fertile environment for market-based • Preparation: Helps affected
programming. Cash assistance offers more populations prepare for a shock.
flexibility and choice. Unlike in-kind assistance, cash
can be easily transported in case of displacement. • Protection: Shields them from
Especially if delivered digitally (for example through the worst effects of the shock.
electronic transfers redeemable at any outlet in the
national FSP network), cash offers displaced • Prevention: Prevents them
recipients the opportunity to continue benefiting from experiencing further
from the program while in displacement. shocks in the future.

Like shops, FSP outlets face temporary disruptions in operational status. Outlets in airstrike-
affected areas have closed, but managers continued to monitor the security situation and plan
for re-opening. The redemption curve has flattened, indicating that it takes a higher number of
days for program participants to redeem assistance. However, the large majority of program
participants redeem assistance in 14 days and well before the end of the monthly transfer cycle.
For the outlets that remain open, challenges with overcrowding seem to be due to the specific
validation process, involving IDs. The biggest hurdle to the upscale of the CVA response is the
lack of an identification and registration platform for IDPs. Without such a platform, the CVA
response faces significant risks for fragmentation and duplication.

The table below summarizes the extent to which the CVA pre-conditions are met in the current
context in Lebanon, based on the findings from the desk review and data analysis outlined in this
report. In light of the evidence, this report concludes that CVA should be considered as a
response option the current context in Lebanon. This echoes the findings from other contexts.
For example, the experience with the emergency response in Gaza since October 2023 has
demonstrated that cash assistance can work effectively even in highly challenging environments
and helps dispel myths and build confidence among donors and practitioners.

MERCY CORPS Cash in Armed Conflict 20

Market conditions Affected population’s needs and preferences

• Markets are functioning regularly • Cash is already used by affected

(functionality) and are supplied to populations - Yes
meet demand - Yes • Affected populations cannot access
• The items needed to meet needs are food or income for basic needs – Yes,
locally available - Yes more granular assessments are
• Markets are accessible (access) Yes, ongoing
with the exception of border areas • Protection risks will not be amplified by
the cash distribution – Yes
Operational conditions: Awareness and acceptance of cash

• Cash can be delivered safely and • Community awareness and acceptance

effectively – Partial, the identification of cash – Yes, with streamlining of
and registration platform for IDPs is conflict-sensitivity considerations
missing • Political awareness and acceptance of
• Functional and reliable payment cash - Yes
systems exist – Yes
• Programmatic expertise and
operational capacity are available –
Yes

Recommendations
For aid agencies:

• Regularly monitors the feasibility pre-conditions for the CVA response: market and FSP
monitoring should continue at high frequency, even with small sample sizes, to ensure
that the pre-conditions for CVA remain met.
• Advocate for the adoption of a harmonized CVA response for basic needs wherever
feasible: support the work of BAWG and FSAC to produce harmonized cash guidance for
all (food and non-food) basic needs. The guidance should cover at a minimum: transfer
value, duration and recommended selection strategy

For donors:

• Adopt a cash-first policy for meeting the basic needs IDPs living outside collective shelters;
require partners who propose an in-kind response to articulate the rationale and
benchmark it against cash. This is in line with USAID cash benchmarking policy: no in-kind
program should be funded unless it is likely more cost-effective than an unconditional
cash transfer40.

40
Source: Wright Y., ”Cash transfers should be the default, not just the benchmark”, (September 2023)

MERCY CORPS Cash in Armed Conflict 21

For the government of Lebanon

• Design and roll-out a reliable and safe identification and registration platform of IDPs of
any nationality: building on the lessons learnt from existing systems (such as the WFP
platform built before the escalation of hostilities or the DAEM platform built to support
the ESSN national social safety net), the government of Lebanon should support the
timely and efficient roll-out of the platform,
• Promote linkages between social protection systems and humanitarian cash
interventions: the government of Lebanon should use existing registration lists to expand
social safety nets horizontally, by partnering with humanitarian actors that have the
capacity and resources to distribute cash assistance to vulnerable families

MERCY CORPS Cash in Armed Conflict 22

CONTACT

Chiara Genovese
Cash Advisor
cgenovese@[Link]

Elissar Gemayel
Director of Programs
egemayel@[Link]

About Mercy Corps

Mercy Corps is a leading global organization
powered by the belief that a better world is
possible. In disaster, in hardship, in more than
40 countries around the world, we partner to
put bold solutions into action — helping people
triumph over adversity and build stronger
communities from within.
Now, and for the future.

45 SW Ankeny Street
Portland, Oregon 97204
888.842.0842
[Link]

MERCY CORPS Cash in Armed Conflict 23