Utility of Cash Assistance in Gaza

At this time, it is FEWS NET’s analysis that humanitarian food assistance is having a moderate to high impact on acute food insecurity in southern Gaza, but a low impact on acute food insecurity in northern Gaza. 

• For southern Gaza (Khan Younis, Deir al-Balah, and Rafah governorates), this is evidenced by the collection of over 14,400 metric tons of wheat flour, food parcels, and bulk supplies through daily UN-coordinated convoys in September 2025, the preparation of 895,000 meals daily across 165 kitchens as of October 11, and the daily distribution of 100,000 two-kilogram bundles of bread since early October. Continued access to bread, hot meals, and family food parcels is facilitated by WFP, UN agencies, and local NGOs across operational distribution points. As of late September, the Gaza Humanitarian Foundation (GHF) was distributing approximately 10,000-20,000 food parcels daily; however, GHF distributions have reportedly halted since the start of the ceasefire.
• In northern Gaza (Gaza and North Gaza governorates), the Zikim border point has remained closed for over 30 days – since September 12 – resulting in no food reaching northern Gaza directly. Prior to the ceasefire, there was a nearly 70 percent decline in cooked meals from the first half to the second half of September. In October to date, 12 kitchens have prepared 59,000 hot meals on average daily.

Of the total food assistance delivered, FEW NET assesses that cash assistance constitutes a small and limited share of total food aid. According to data from the Food Security Sector, OCHA, and WFP, approximately 10,000 to 20,000 households were being reached monthly with multipurpose cash assistance (MPCA) from OCHA or e-wallet transfers from WFP in August and September. An increase was observed October 1–6, with WFP already reaching 24,500 people with e-wallet payments. Both MPCA (~USD 295) and WFP e-wallet transfers (~USD 372) provide similar amounts of cash, though, and households’ purchasing power remains limited due to high food price inflation. Ultimately, while not as extensive as in-kind food assistance, a substantial number of people – likely over 125,000 – received some form of cash aid in September 2025.

Cash assistance holds the potential to support local markets and private sector recovery, allowing households to buy locally produced food and helping suppliers and small businesses resume operations. However, the effectiveness of cash assistance to date has been limited by the impacts of the conflict, including displacement, damage to payment infrastructure, and restrictions on the entry of market supply. Coverage across the population is uneven due to large-scale displacement and the potential for duplication of beneficiaries between programs. Digital systems, including PalPay, Jawwal Pay, and e-wallets, are required to facilitate cash transfers, and to date these systems have been constrained by poor connectivity, damage to digital infrastructure, and high fees for financial services. Notably, WFP has found that digital forms of money remain less preferred among retailers despite liquidity issues with banknotes. As a result, those receiving cash assistance via digital means have faced barriers to its effective use in markets. Finally, prior restrictions on the entry of commercial supplies have driven low food availability in markets and high prices. While market supply and activity are expected to rebound substantially during the ceasefire, the pace and extent of recovery is contingent on structural support to facilitate imports into Gaza and access to financial services for both traders and consumers of food.

Humanitarian assistance in a complex emergency often requires a balance of market support to avoid harming the market actors necessary to rebuild functional economies and humanitarian transfers to provide fast, immediate response where markets are not yet fully capable. In Gaza, market conditions and the capacity of the financial sector will rapidly evolve as additional conditions of the cease-fire are met and as populations move, policies shift, and access for traders and humanitarian responders changes, requiring strong and frequently updated response analysis to determine appropriate response modalities.

To provide additional context for the USG’s decision making on the utility of cash assistance, FEWS NET details below the functionality of systems in place to facilitate cash transfers by looking at current market and financial sector status. For more detailed response analysis in complex emergencies, FEWS NET recommends further consultation with organizations with expertise in cash assistance and response analysis including but not limited to the Cash and Learning Partnership and the Palestine Cash Working Group for existing assessment and modality decision guidance.

Current market status. Most households in Gaza have very limited income due to the collapse of their livelihoods. Destitution is widespread. Households rely on gifts from friends and relatives and humanitarian food assistance as key sources of food. Very few households can purchase adequate quantities of food in the market, so effective consumer demand for food is minimal. Cash transfers could be an important part of livelihoods recovery and encouraging economic recovery. However, markets and humanitarian assistance in northern Gaza are only minimally functional. For cash transfers to operate at scale, market supply of food would need to substantially increase. Food prices would also need to stabilize, requiring a return to more typical levels of supply and demand, though there are already some indications that prices are becoming more stable in August and September in southern Gaza. 

Commercial cargo into the Gaza Strip remains limited, with around 40 trucks carrying food entering Gaza in late August and early September. In September, 31,532 MT of commercial food were inspected and approved for entry by COGAT compared to 61,377 MT of humanitarian food assistance. From October 1-14, COGAT reports 20,892 MT of humanitarian food were inspected and approved for entry, and just 7,020 MT of commercial food. UNOPS reported 26,130 MT of food offloaded in September and 5,207 MT from October 1-14. While the Kerem Shalom crossing in the southern part of Gaza is actively receiving assistance, there is continued fluidity around which border crossings are open and how many trucks will be permitted to cross into Gaza at each border crossing. For example, there have been reports that the Rafah crossing for trucks has both been open and remains closed as of October 15, 2025. This makes planning for traders difficult because –  while a large increase in food supply is expected – it has not yet happened.

In August and September, food prices fell in both northern and southern Gaza due to the increase in commercial supply. Also, as plans for the ceasefire have become clearer, some traders may be trying to sell in anticipation of increased food supply from humanitarian partners. For example, in Deir Al-Balah, in the third week of September, the price of a 25 kg bag of wheat flour had fallen 25 percent from the previous week, though it was still 240 percent more expensive than it was at the end of February 2025. In Gaza governorate, the price of the same 25 kg bag of flour had fallen 15 percent from the second to the third week of September, but it remained 258 percent higher than the end of February 2025.

Shop owners reported that their stocks remain far below average, and due to price volatility, many owners are trying to restock daily rather than in bulk as a hedge against price fluctuations. Many shop owners in September continue to report that cash shortages continue to prevent them from restocking. As of September 27, in Gaza City, there were 50 communal ovens operating but no WFP-subsidized bread production. As of October 4, WFP-subsidized bread production restarted at bakeries in Deir Al-Balah and Khan Younis producing an estimated 200,000 kg of bread per day. World Central Kitchen and its partners are baking up to 1,000 loaves of bread per day in central Gaza as of October 1. For both households and commercial food enterprises, fuel for cooking remains limited. While cooking fuel did reenter Gaza for the first time on October 12th since March 2025, supply remains very low and many households continue to burn trash or collect firewood to cook.

Current financial sector status. The financial sector in Gaza has been strained to the limits of functionality over the course of the war, resulting in a severe liquidity crisis. Though the sector has proved resilient, adapting to e-wallets at an incredible pace, the underlying system is increasingly stressed given challenges including the restrictions on cash repatriation and the depletion of digital NIS in bank accounts. The World Bank’s September analysis highlights the ongoing risk stating “despite surface-level resilience, these pressures pose immediate threats to financial stability.” 

As of early October, no bank branches or ATMs were open and operational. The last damage assessment in February 2025 reported that over 60 percent of banks had been completely destroyed, with most of those remaining having sustained at least partial damage. As early as February only two ATMs were partially functional, of an initial 94 total. Among non-bank financial institutions, 83 percent of microfinance offices were impacted, with 15 out of 18 branches damaged, and 32 of 46 currency exchange branches were affected. The Palestinian Monetary Authority announced on October 11 the reopening of several bank branches in Gaza to start this week, including the Arab Bank (Rimal Branch), Bank of Jerusalem, and Palestine Bank (Rimal, Al-Nuseirat, Deir al-Balah, and Gaza Branches). The Housing Bank and Cairo Amman Bank will remain temporarily closed. Cash liquidity will be provided in shekels, Jordanian dinars, and US dollars, and banking operations including withdrawals, deposits, transfers, and payment settlements will gradually resume. However, there is currently a severe shortage of physical cash, as physical shekels have not been allowed to enter since the start of the war. The paper money that remains is both scarce and substantially degraded, leading to the emergence of a market for money repair. 

The cash shortage has driven a rapid adoption of mobile payments and e-wallets – which surged in 2025, with usage nearly tripling in value in the first half of the year (Figure 10 below). PayPal and Jawwal Pay are two of the leading service providers. Challenges for broader adoption remain, including access to a smartphone and digital wallet, mobile network availability and reliability, electricity for charging phones, current price premiums for digital payments, and the implementation of standard Know Your Customer (KYC) regulations including identification verification. The shortage of cash also led to the creation of a parallel market for bills and a sharp increase in fees for digital payments and cash withdrawals which peaked in June and July at around 40-50 percent. In September the fees decreased to 30-35 percent but remained elevated. WFP attributes the decline to the increasing adoption of digital payments by both consumers and traders. Foreign remittance fees were also as high as 50 percent in June.

As of September, Gaza remained in a severe energy crisis. Given the absence of a functional power grid and the scarcity of diesel generators and fuel, households have been using repurposed car batteries to charge mobile phones. Telecommunications infrastructure has also suffered an estimated 85 percent rate of destruction. Both infrastructure and policy restrictions (e.g. Israel restricts access to Starlink in Gaza, citing security) continue to constrain mobile network access, further limiting access to mobile payments and e-wallets.

Given the numerous challenges, the liquidity crisis has continued to deepen. According to WFP’s September Market Monitor for Palestine cash shortages were a constraint preventing supplier payments and/or restocking for 77 percent of surveyed shops. The constraints on electronic payments and availability of physical cash have led to an overall reduction in economic activity with shops unable to access stock and reduced household access to cash depressing demand.

Specific information is not yet available on the status of financial systems in northern Gaza, as civilians and market actors continue the process of returning. It is assumed that bank branches and ATMs will reopen gradually according to PMA (Palestine Monetary Authority), prioritizing undamaged infrastructure. Cash availability is likely to remain limited due to physical currency shortages, damaged bank infrastructure, high demand from returning households, and the time needed to restore operational liquidity. Households will continue to rely on digital wallets such as PalPay and Jawwal Pay, as well as informal money changers. However, restoring the electricity, internet connectivity, and telecommunications needed to support financial services will likely be slower in the north which sustained more substantial damage and will affect the pace and scale of the resumption of both digital and in-person financial services.