Multipurpose cash assistance explained

Multipurpose Cash Assistance (MPCA), also known as Multipurpose Cash Transfers (MPC) or Multipurpose Cash-Based Assistance, is a form of humanitarian aid that provides cash transfers to households in crisises. The cash is intended to meet a range of basic needs, allowing recipients the flexibility to decide how best to allocate the funds. Unlike other forms of aid, MPCA is not restricted to specific uses or sectors, making it a versatile tool in emergency response and recovery efforts.

Definition

MPCA is defined as:

"A transfer (either regular or one-off) corresponding to the amount of money a household needs to cover, fully or partially, a set of basic and/or recovery needs. The term refers to transfers designed to address multiple needs, with the transfer value calculated accordingly."^[1]

Key Characteristics

• Unrestricted: MPCA is unrestricted, meaning that recipients can spend the cash as they see fit without limitations on its use.^[2]
• Cash-Based: MPCA is always provided in the form of cash or cash equivalents, such as bank transfers or mobile money. It does not include vouchers or in-kind assistance.^[3]
• Multipurpose: MPCA is designed to address multiple needs across different sectors, such as food, shelter, and healthcare, rather than focusing on a single sector.^[4]
• Typically Unconditional: Although MPCA can be conditional in theory, it is usually provided without conditions, meaning recipients are not required to undertake specific actions to receive the assistance.^[5]

What MPCA Is Not

MPCA is distinct from other forms of aid, including:

• Not Vouchers: MPCA does not include vouchers, even if those vouchers can be used for multiple purposes. Vouchers, by nature, impose some level of restriction.^[6]
• Not Restricted: Any form of restricted transfer, whether cash or voucher, is not considered MPCA, as MPCA must provide recipients with full freedom on how to use the assistance.^[7]
• Not Sector-Specific: Cash transfers designed to meet needs in a single sector, such as cash for food or shelter, are not classified as MPCA, even if the cash is unrestricted.^[8]
• Not In-Kind Assistance: MPCA excludes in-kind aid, even when such aid is intended to meet multiple needs.^[9]

How MPCA Is Defined in Practice

• Needs Assessment: MPCA is based on comprehensive assessments of household needs across multiple sectors to determine the appropriate level of assistance.^[10]
• Minimum Expenditure Basket (MEB): The Minimum Expenditure Basket (MEB) is a tool used to calculate the minimum cost of basic needs that can be monetized. This tool helps in defining the value of the MPCA transfer.^[11]
• Transfer Value: The transfer value of MPCA is determined based on the MEB and a gap analysis, which takes into account other sources of income or assistance that the household may have.^[12]
• Market Analysis: Before implementing MPCA, humanitarian organizations must conduct a market analysis to ensure that local markets can support the demand created by MPCA transfers.^[13]
• Coordination: In humanitarian contexts, MPCA implementation requires coordination between various stakeholders, including clusters, sectors, and the Cash Working Group.^[14]

Importance in Humanitarian Response

MPCA is recognized as an essential tool in humanitarian response for several reasons:

• Flexibility and Choice: MPCA provides maximum flexibility to affected populations, allowing them to prioritise their needs and make choices about how to use the funds, thus promoting dignity and autonomy.^[15]
• Efficiency in Aid Delivery: MPCA can meet multiple needs simultaneously, which increases the efficiency of humanitarian aid delivery.^[16]
• Stimulating Local Markets: By providing cash instead of in-kind aid, MPCA has the potential to stimulate local economies and markets, benefiting the broader community as well.^[17]
• Adaptability: MPCA is adaptable to diverse and changing needs, making it a versatile solution in complex and evolving humanitarian crises.^[18]

Notes and References

1. Web site: Glossary of Terms . The Cash Learning Partnership . 2023 . 12 October 2024.
2. Web site: Glossary of Terms . The Cash Learning Partnership . 2023 . 12 October 2024.
3. Web site: Cash Assistance and Protection: Why, What and How? . UNHCR . 2019 . 12 October 2024.
4. Web site: 22 July 2024 . IASC Guidance on Multipurpose Cash (MPC) Section and Cash and Voucher Assistance (CVA) Overview in Humanitarian Needs and Response Plans (HNRPs) . 12 October 2024 . Inter-Agency Standing Committee.
5. Web site: Glossary of Terms . The Cash Learning Partnership . 2023 . 12 October 2024.
6. Web site: Glossary of Terms . The Cash Learning Partnership . 2023 . 12 October 2024.
7. Web site: Cash Assistance and Protection: Why, What and How? . UNHCR . 2019 . 12 October 2024.
8. Web site: 22 July 2024 . IASC Guidance on Multipurpose Cash (MPC) Section and Cash and Voucher Assistance (CVA) Overview in Humanitarian Needs and Response Plans (HNRPs) . 12 October 2024 . Inter-Agency Standing Committee.
9. Web site: Glossary of Terms . The Cash Learning Partnership . 2023 . 12 October 2024.
10. Web site: 22 July 2024 . IASC Guidance on Multipurpose Cash (MPC) Section and Cash and Voucher Assistance (CVA) Overview in Humanitarian Needs and Response Plans (HNRPs) . 12 October 2024 . Inter-Agency Standing Committee.
11. Book: Calculating the Minimum Expenditure Basket (MEB): A Guide to Best Practice . The Cash Learning Partnership . 2022.
12. Web site: 22 July 2024 . IASC Guidance on Multipurpose Cash (MPC) Section and Cash and Voucher Assistance (CVA) Overview in Humanitarian Needs and Response Plans (HNRPs) . 12 October 2024 . Inter-Agency Standing Committee.
13. Web site: Cash Assistance and Protection: Why, What and How? . UNHCR . 2019 . 12 October 2024.
14. Web site: 22 July 2024 . IASC Guidance on Multipurpose Cash (MPC) Section and Cash and Voucher Assistance (CVA) Overview in Humanitarian Needs and Response Plans (HNRPs) . 12 October 2024 . Inter-Agency Standing Committee.
15. Web site: 22 July 2024 . IASC Guidance on Multipurpose Cash (MPC) Section and Cash and Voucher Assistance (CVA) Overview in Humanitarian Needs and Response Plans (HNRPs) . 12 October 2024 . Inter-Agency Standing Committee.
16. Web site: Cash Assistance and Protection: Why, What and How? . UNHCR . 2019 . 12 October 2024.
17. Web site: Glossary of Terms . The Cash Learning Partnership . 2023 . 12 October 2024.
18. Web site: 22 July 2024 . IASC Guidance on Multipurpose Cash (MPC) Section and Cash and Voucher Assistance (CVA) Overview in Humanitarian Needs and Response Plans (HNRPs) . 12 October 2024 . Inter-Agency Standing Committee.