Financial inclusion for refugees

  • Edvardas BUMSTEINAS, EIB
  • Joscha ALBERT, GIZ 
  • Niclaus BERGMANN, Sparkassenstiftung für internationale Kooperation (SBFIC)
  • Alia FARHAT, Al Majmoua, Lebanon


Edvardas BUMSTEINAS explained that the panellists would look back on the developments in the field of financial inclusions for refugees, which was an important subtopic of the European Microfinance Award 2015: Microfinance in Post-Disaster, Post-Conflict and Fragile States. He then introduced the four panellists. 

Amelia GREENBERG introduced the Social Performance Task Force (SPTF), which has worked with the UNHCR since 2015. She presented several causes for financial exclusion of refugees by financial service providers (FSPs) based on research by SPTF. These include legal, political and regulatory barriers, and lack of information by FSPs that fuels the misperception that refugees are high risk clients. 

Greenberg presented several key findings of research on refugees which showed that refugees are not riskier to FSPs than other clients and have similar needs for microfinance products. Non-financial services are particularly important with refugee clients, however, as a channel through which to make contact and build trust, as well as to build skills. The research also showed that almost all refugees have access to technology. Greenberg also highlighted three main obstacles for financial inclusion of refugees as discussed in the workshop session which took place on the EMW Action Day: information gap between the refugees and the financial institution, a hostile attitude towards refugees, and the legal or regulatory environment. She also discussed several solutions, such as active awareness raising and advocacy, as well as leveraging refugee-run organisations. 

Joscha ALBERT presented a case study of GIZ in Jordan. In Jordan, there are over 650,000 Syrian refugees, which are not allowed to open a bank account, but can open mobile wallets. Remittances make up an increasing share of Jordan’s GDP since the conflict in Syria. However, only 25% of Jordanian adults have a bank account and only 2% of all payments are done electronically. At the same time, most Jordanian people and Syrian refugees own a mobile phone. Albert explained that GIZ’s project Digi#ances was set up to support the Central Bank of Jordan to build on the existing technical infrastructure and regulatory framework conditions to improve access to remittan­ces and other financial services through digital solutions. This project targets both Syrian refugees and Jordanians with no or only limited access to financial services.

Digi#ances started with a research phase in January 2016, looking into the needs and demand of the target group, as well as the supply side and regulatory barriers. GIZ advises the Central Bank of Jordan on developing and implementing appropriate regulation for digital cross-border remittances. A pilot supports the development and use of digital money transfers within Jordan. The project also provides trainings and raises awareness to improve financial literacy and the use of digital financial services. 

Niclaus BERGMANN started his presentation with a background on the Savings Bank Foundation for International Cooperation (SBFIC), founded by the German Sparkassen (Savings Banks). SBFIC is a non-profit organisation that promotes financial inclusion in developing countries. Sparkassen in Germany have a public mandate: to serve everybody. He explained that when 800,000 refugees arrived in Germany in 2015, these people needed a bank account to receive public benefits. Of these refugees, about 75% opened an account at a local Sparkassen. 

This resulted in several challenges for the Sparkassen, such as language barriers, lack of financial and technological literacy and dissatisfaction of existing customers (due to long waiting times). As refugees often change location within Germany, they even need to open a second Sparkassen account after they move, because these accounts cannot be transferred. Moreover, it was difficult to cope with bank regulations to open these accounts, as refugees did not have an identification documents or proper registration. Bergmann stressed that the Sparkassen needed to accept this situation. He presented several solutions, such as close cooperation with local authorities and NGOs, information leaflets in various languages and branches that were dedicated to refugees specifically. 

Alia FARHAT reacted on the presentations of the other panellists from her experience on working with Syrian refugees in Lebanon. Farhat reiterated the information gap that Greenberg mentioned in working with refugees and that non-financial services are crucial. She added that although ultimately products for refugees and other MFI clients should be the same, at first new refugees are riskier than normal MFI clients simply because of the lack of credit history available. She valued the public mandate of the Sparkassen to serve everybody. In Lebanon, refugees are also not allowed to open a bank account. 

Farhat also shared some key developments of Al Majmoua, the Lebanese Association for Development. She explained that since its pilot in 2015, Al Majmoua vastly expanded its client base of Syrian refugees. She added that they needed to get Al Majmoua staff and clients on board to start working with the refugees. The main challenge in Lebanon is dealing with the government. The Lebanese government has a cautious attitude towards livelihoods initiative delivered to the Syrian refugees because of the fear it would encourage them to stay permanently in the country. The government also uses regulations to prevent these refugees from working except in agriculture, construction and environment. As per the UNCHR, around one-third of refugees would ultimately stay in the host country.


Farhat argued that the vast number of new accounts for refugees could be a viable business case for Sparkassen. Bergmann explained that this was not the case. Incomes for these accounts are limited, while the costs are much higher due to the challenges in opening accounts for refugees and keeping track of dormant accounts after refugees moved. He explained that as a public institution, Sparkassen are not maximising their profits. When Sparkassen make profits, as they usually do, they use this to strengthen their capital and invest in social purposes serving refugees is an example for this.

The moderator asked what GIZ wants to put on the agenda of the Germany’s G20 presidency. Albert mentioned that financial inclusion of both refugees and internally displaced persons is an important topic, with a focus on women and youth. He confirmed that there is an information gap and that putting this topic on the agenda could help close this gap. However, Albert was not able to provide any information about the upcoming G20 priorities. Greenberg added that although there is an information gap in working with refugees, she believes that there is someone who does have at least some of the information that the rest of us are seeking. Some organisations have been working with refugees for over 10 years. All of us would benefit from a better understanding of who is already working with refugees and what they have learned, so we can use that knowledge as a foundation for the design of our own initiatives. 

A member of the audience explained that he was a refugee in the Netherlands 42 years ago. He commented that governments in Jordan and Lebanon are afraid because they already have so many refugees. As in many countries in the Middle East, they have both temporary refugees from other countries and internally displaced persons within the countries. It often depends on a country’s political or economic situation whether they take in refugees from other countries. He added that in the Netherlands, refugees have the opportunity to become permanent residents. Bergmann responded that how countries deal with refugees depends on how they see refugees, as permanent or not? Most refugees in Europe do not want to go back, therefore integration must start immediately. The moderator concluded that regulations play a big role in this integration process.