Digital Cash in Disaster Relief: Speed, Leakage and What Works

In July 2020, as the monsoon floods in Bangladesh built toward one of their longest peaks in decades, more than 23,000 families received 4,500 taka each on their mobile phones. The money arrived about five days before the water crested. When researchers followed up, those families were 52% less likely to have gone a full day without food during the flood, according to a case study of the WFP pilot. They had used the cash to move livestock, store grain and buy food before prices jumped.

That pilot is the cleanest illustration of an argument humanitarians have been making for fifteen years: in a disaster, money that moves digitally and early does more good than goods that move physically and late. The argument has largely been won on evidence. What is new in 2026 is that the money itself is drying up, and the remaining budget has to work harder. This piece looks at what the data says about speed and leakage, how India's benefit-transfer plumbing fits in, and where digital relief still breaks down.

A shrinking pot, a settled argument

Cash and voucher assistance, the sector's term for aid given as money rather than goods, totalled US$7.3 billion in 2025, down 11% on the year and 31% below its 2022 peak, according to the ALNAP State of the Humanitarian System 2026. It was the third straight annual decline. Cash held steady at about 21% of all international humanitarian assistance, which means the fall reflects the overall squeeze on aid rather than a loss of faith in the method.

Part of the drop is mechanical. The very large, highly digitised cash programmes in Ukraine and after the Turkiye-Syria earthquakes wound down. Part is political: some governments in West and Central Africa restricted cash programming, and ALNAP notes that cash is also easier to cut quickly than a warehouse full of food. That last point deserves more attention than it gets. Flexibility cuts both ways. A modality that can be scaled up in days can be scaled down in days too.

The World Food Programme remains the largest single deliverer. It transferred about US$2.2 billion in cash-based assistance in 2024 and reached 124.4 million people with all forms of aid, according to its annual performance report on ReliefWeb.

The efficiency case, in rupees

The strongest evidence on leakage now comes from comparing what share of a budget actually reaches people. A CALP Network study cited by ALNAP looked at US$11.4 billion of spending between 2014 and 2025. Cash and voucher programmes delivered 71% to 77% of their budgets directly to recipients. In-kind food aid delivered 54% to 56%. Overall, cash came out 37.5% more efficient, and larger cash programmes got better with scale while in-kind did not.

Worked example: a Rs 10 crore relief budget

Apply those ratios to a district relief allocation of Rs 10 crore. Delivered as cash, somewhere between Rs 7.1 crore and Rs 7.7 crore lands in households' hands. Delivered as food kits, between Rs 5.4 crore and Rs 5.6 crore does. The gap is Rs 1.5 crore to Rs 2.3 crore, or roughly the price of an extra 20,000 to 30,000 families receiving a Rs 7,500 transfer. ALNAP puts the system-wide prize at US$1.1 billion to US$3.3 billion a year if the efficiency levers in the study were applied everywhere.

The caveats matter. The cash advantage shrank in places with heavy security vetting, such as Syria, in high-inflation economies where market checks are costly, and in sudden disasters where no cash system existed beforehand. Cash beats goods when markets work and when a delivery channel is already in place. Where neither is true, it is not automatically better.

The rail is rarely the bottleneck in disaster relief. The list of who is eligible almost always is.

India's version: DBT meets disaster norms

India approaches the problem from the other end. Instead of building a humanitarian payment channel and attaching it to a crisis, it has a vast standing benefit-transfer system and plugs disaster payments into it. A report published in April 2025 by a Viksit Bharat senior fellow, summarised by Business Today, estimated that direct benefit transfer saved Rs 3.48 lakh crore between 2009 and 2024 by curbing leakages, with food subsidy reforms accounting for about 53% of that. Treat the precise figure with some care: it is an estimate built on assumptions about what would have leaked, not an audited number.

Speed is where the standing system pays off. In January 2022, Odisha credited Rs 3,000 each to the bank accounts of 32 lakh families for repairs to houses built under state housing schemes, within 15 days of the cabinet decision, as reported by Orissa Post. That is a scale few humanitarian agencies could match in two weeks, and it worked because the beneficiary list and the bank accounts already existed. The Jan Dhan account base is, in effect, disaster infrastructure.

What a family can actually receive

The amounts are set by the State Disaster Response Fund norms. The 2022-23 to 2025-26 schedule, published on an Assam district portal, lists Rs 4 lakh ex gratia for a death, Rs 1.2 lakh for a fully damaged house in the plains and Rs 1.3 lakh in hilly areas, and Rs 2,500 each for lost clothing and utensils.

Take a farming family in a plains district whose house is destroyed and whose 1.5 hectares of irrigated crop is lost. The norms add up to Rs 1,20,000 for the house, Rs 5,000 for clothing and utensils, and Rs 25,500 in crop input subsidy at Rs 17,000 per hectare. That is Rs 1,50,500 in total. For a household of that kind, the timing of the money matters almost as much as the amount. A crop subsidy that arrives after the next sowing window has passed is a compensation payment, not a recovery tool. Families should check the current norms and eligibility with their district administration, as states can top up these amounts.

Where it breaks: verification, not payment

Sri Lanka's response to Cyclone Ditwah at the end of 2025 shows the pattern clearly. By 30 December, about 87.4% of 450,225 eligible families had received a flat Rs 25,000 relief allowance, according to the Ministry of Defence figures reported by Ada Derana. But only 8.63% of 153,593 families eligible for the larger Rs 50,000 payment had been paid, and under 15% of schoolchildren had received their education grant.

The flat payment needed one check: is this family on the list? The larger tier needed damage assessment. That is the universal shape of disaster finance. Small, flat, early transfers move at the speed of the payment rail. Large, assessed transfers move at the speed of a field officer with a clipboard. Digital tools such as satellite imagery and geotagged photos can speed up assessment, but they introduce their own exclusion risks for informal housing and unregistered land.

The other failure point is the financial system itself. ALNAP records that diaspora money raised for Afghanistan was held up by the banking system and missed the winter it was meant for. In sanctioned or de-banked economies, the fastest rail on paper can be the slowest in practice. This is where some agencies have experimented with purpose-bound and digital-voucher designs, which narrow what money can be spent on in exchange for working in fragile settings.

Mobile money is the crisis rail in most of the world

Outside India and a handful of other countries with deep bank-account coverage, the default disaster channel is mobile money. East Africa's mobile money networks and South Asia's wallet providers already reach households that no bank branch serves. Their advantages in a crisis are practical: a phone number is easier to verify remotely than a bank account, agents can cash out in the village, and payments can be sent in batches to tens of thousands of numbers in an afternoon.

The limits are just as practical. Floods knock out cell towers and power. Agent networks run out of physical cash when everyone withdraws on the same day. And women in many households have less access to a phone in their own name, which affects who controls the transfer. Programmes that work well tend to pre-register recipients, pre-position agent liquidity and build in a fallback to physical distribution if networks fail.

Our view on what actually matters

We think the debate about cash versus in-kind is over, and the debate about digital versus physical cash is mostly over too. The open questions are about lists and timing. Who is on the list before the disaster? Can the trigger fire before the damage, as in the Bangladesh pilot? Can a national safety net, like government-to-person payment systems elsewhere, absorb emergency top-ups without new paperwork?

India is unusually well placed on the first and third questions because of its benefit-transfer base. It is less advanced on the second. Anticipatory payments tied to forecasts, such as a cyclone track or a river gauge reading, are still rare in Indian state practice, even though the payment plumbing to deliver them already exists. That is the gap worth closing.

What to watch next

• October to December 2026: the northeast monsoon and the Bay of Bengal cyclone season, the next real-world test for state relief payments in Odisha, Andhra Pradesh, Tamil Nadu and Sri Lanka.
• 2026-27: the first full year of disaster-fund allocations under the Sixteenth Finance Commission period, after the 2022-26 SDRF norms cycle ended in March 2026. Watch whether the revised schedule raises the Rs 1.2 lakh house assistance figure.
• Early December 2026: the UN's annual Global Humanitarian Overview for 2027, which will show whether cash funding falls for a fourth year from US$7.3 billion.
• 30 November 2026: the end of the Atlantic hurricane season, after which agencies typically publish speed-of-payment reviews for Caribbean and Central American responses.

About this researchMuffinPay InsightsIndependent analysis of stablecoins, CBDCs, cross-border payments and digital public infrastructure. Every figure is linked to its source. Read our editorial standards →