[Conversations on...] The Roadmap to financial inclusion of refugees

  • Mariam Jemila ZAHARI, Alliance for Financial Inclusion

Large gaps remain in the access of forcibly-displaced persons (FDPs) to appropriate financial services. The ‘Roadmap to the Sustainable and Responsible Financial Inclusion of FDPs’ is there to advance financial inclusion of FDPs. This roadmap offers a set of key policy recommendations for each relevant stakeholder group: governments, the private sector, humanitarian and development agencies, research organisations, and standard-setting bodies. It illustrates a vision for a way forward, and encourages stakeholders to take action to implement the Roadmap’s recommendations.

In this session, Lisa KLINGER, GIZ, and Mariam Jemila ZAHARI from the Alliance for Financial Inclusion (AFI) discussed their experiences in developing and implementing the agenda of the roadmap, as well as key obstacles and opportunities they have encountered in this joint effort.

Klinger referred back to the 2017 G20 Hamburg Summit, which was the first time that financial inclusion was put on the international agenda.  This has been the start of the development of the Roadmap. Since then, a lot has been achieved, said Klinger. While it was initially about creating a better understanding of the importance of financial inclusion of FDPs, the focus is now on how to achieve it. A multi-stakeholder approach is key in that, and the Roadmap is a guidance document for the different stakeholders.  

Klinger elaborated on the lessons learnt about the use and implementation of the Roadmap. Firstly, she stressed that creating a common language is a key asset in the success of FDPs’ financial inclusion. Given that all actors speak different languages, and have different incentives and objectives, there is a need to start a dialogue to better understand each other. Secondly, there is a need to gain more experience through research. The Roadmap has been built on country examples, based on research and talks to country representatives. However, now it needs to be implemented and adjusted to better understand how the recommendations can be implemented in various contexts.

Zahari explained how AFI has used the Roadmap in their project ‘Advancing the Financial Inclusion of FDPs: Putting Policy Recommendations to Practice’. The National Bank of Rwanda, the Afghanistan Bank and the Central Bank of Mauritania have piloted the project within their jurisdictions. These central banks have taken policy actions related to regulatory barriers, thereby enhancing the financial inclusion of FDPs by integrating them into National Financial Inclusion Strategies. More specifically, they amended know your customer (KYC) regulations to ease account opening for FDPs and conducted multi-stakeholder workshops to raise awareness of relevant policies and regulations.

The main obstacles encountered by AFI in implementing the recommendations of the Roadmap into their programme were threefold. Firstly, Zahari revealed that there is very little coordination at the national level. Awareness among relevant stakeholders, including policy makers, responsible Ministries, humanitarian agencies and development organisations, is low. This makes coordination extremely tricky. Secondly, there is a lack of financial inclusion data, both on the national level as well as on the global level. Without such data, FDPs are invisible, making it impossible to establish a baseline and to create specific indicators which can be incorporated into a Foreign National Information System. Thirdly, there is a strong need to address both digital and financial illiteracy among FDPs.

Klinger continued to discuss the utility of proportional regulation, which can allow for simpler KYC-procedures for low-risk financial accounts for FDPs. Policy makers/regulators can promote such regulatory approaches, Klinger stressed, which could include electronic KYC procedures. Given that FDPs often lack legal status and documentation, this could permit FDPs to use other types of identity cards (for example, UNHCR ID card) to open accounts. Klinger continued to illustrate how, during the COVID-19 pandemic, the central bank from Afghanistan worked together with UNHCR to facilitate cash transfers through mobile wallets to FDPs who lost their jobs.

Zahari was asked to elaborate on the progress that has been made in the countries AFI is working in, and the lessons learnt. Zahari explained that, due to the limited visibility of financial inclusion of FDPs in Mauritania, Rwanda and Afghanistan, it was initially necessary to conduct multi-stakeholder mappings and SWOT analyses. This was done together with and under guidance of the central banks in these countries. The outcomes allowed all stakeholders to better understand each other’s perspectives, even those not yet involved in the financial inclusion actions. It also allowed for the identification of challenges and opportunities to better integrate FDPs into national financial inclusion strategies.  

Zahari continued explaining that the project has been working to improve the quality and availability of data on FDPs. This is done in partnership with humanitarian agencies, development organisations and central banks. The national statistics system has also been incorporated to this quest, to ensure there is coordination in analysing and gathering data. Data are currently aggregated by age, geographical area and gender, among other parameters. This allows for the data to be more targeted.

To finalise the conversation, both Zahari and Klinger shared their views on what they would like to see in the near future. Both of them agreed that they would like to see growth in alliances, and more joint efforts of bringing stakeholders together. Zahari specified she would like to see more collaborations on a country level, as well as at global level, given that forced displacement goes beyond borders. Klinger added that she hopes to see that financial inclusion strategies further contribute to already existing efforts to rebuild the livelihoods of FDPs.