Update: SPTF's Work on Financial Inclusion of Refugees
Guidelines on financial inclusion for refugees
The final version of "Serving Refugee Populations: The Next Financial Inclusion Frontier" is now available. The guidelines, written by SPTF consultant Lene Hansen, summarize the state of knowledge and practice, provide specific “how-to” guidance for financial service providers (FSPs), and suggest a business case framework.
The United Nations High Commissioner for Refugees (UNHCR) is translating the guidelines into Arabic, French, and Spanish. These versions will be available in 2017.
Refugee Workshop at European Microfinance Week
The SPTF hosted a full-day workshop on financial inclusion for refugees at European Microfinance Week. More than 20 professionals from various stakeholder groups attended.
During the workshop, Lene Hansen shared findings from her research, and three practitioners presented their experience: Alia Farhat, of Al Majmoua Lebanon, Allan Waititu, of Equity Bank Kenya, and Mado Kubaki, of CARITAS Congo.
Participants identified key lessons from discussions, key obstacles to refugee financial inclusion, and next steps.
Key lessons from the workshop:
- Refugees are not as mobile as FSPs and other stakeholders sometimes assume. More than half of refugees have been in displacement at least 10 years.
- Refugee clients have low delinquency rates. However, providers sometimes take particularly conservative risk mitigation measures when lending to refugees.
- Non-financial services are critical to build trust and acceptance among all parties.
- FSPs do not need to develop a new type of product for refugees.
- FSPs should offer the same terms and products to refugees and to nationals, so as not to breed resentment among the two groups.
Primary challenges to providing financial services to refugees
- Information gap: Both FSPs and refugees lack information about each other.
- Hostile attitudes: Many stakeholder groups have members who are suspicious of and unwelcoming to refugees.
- Prohibitive legal environment: Laws may prohibit FSPs from extending services to refugees or restrict refugees to engage in income-generating activities.
- Advocate for change of laws that restrict financial inclusion of refugees.
- Write more case studies on FSPs that are providing service to refugee clients.
- Contact grassroots organizations that are already working with refugees to help connect FSPs to refugees and to better understand their financial needs.