[Panel session] Where did the 'inclusion' in 'financial inclusion for displaced people' go?

  • Hans-Martin ZADEMACH, Katholische Universität Eichstätt-Ingolstadt
  • Swati Mehta DHAWAN, Katholische Universität Eichstätt-Ingolstadt
  • Felix OKECH, WFP


This session started with a video of a refugee woman in Jordan, who explained the challenges she is facing to sustain her home-based business in times of COVID-19. Due to increased prices of raw materials and less mobility, the woman explained how her clientele went down very rapidly. The video underlined how a savings group she managed to set up has helped her overcome the challenges faced.

The floor was then given to Hans-Martin ZADEMACH and Swati Mehta DHAWAN, both from the German Catholic University Eichstätt-Ingolstadt. They presented the key outcomes of their ongoing research ‘Finance in Displacement’ in Jordan and Kenya, which has been conducted in partnership with The Fletcher School of Tufts University, and the International Rescue Committee (IRC). This research has been facilitated by the German Federal Ministry for Economic Cooperation and Development.

By drawing on evidence in both countries, Zademach and Dhawan explained how the needs and uses of financial services co-evolve with progressions in, or diversification of, livelihoods. Within one to two years of arrival, forcibly displaced persons (FDPs) mainly need basic financial services, like cash transfers and international remittances. If they start to build their livelihoods, FDPs start to demand further financial services, like nano credits and payments. If their livelihoods have become more robust, you tend to see they need larger credits to enhance their businesses, and FDPs start engaging in savings groups.

At the same time, Zademach and Dhawan emphasised that FDPs face structural barriers to their economic and financial inclusion, which often restrain them from increasing their livelihoods. As a result, the financial solutions actually being made available to the displaced are not well contextualised. In Jordan, for instance, the uptake of financial services like mobile wallets and microcredits remains very low.

In Kenya, the situation is different, and refugees are actively blocked from important features on the mobile money transfer service M-PESA. While highly popular among the host community, refugees have restricted options and can only access it from within refugee camps. Zademach explained how it became evident that social relations and friendships have become key in finding solutions to overcome these restrictions.

Zademach and Dhawan concluded that solving the problems around refugees’ legal status and documentation remains critical to fix the financial and income problem. Also, they stressed that financial services stand a better chance of being useful when financial inclusion policies build on foundational policies that afford refugees rights and opportunities. In the design of relevant financial services for displaced people, they suggest to offer translated mainstream financial services that are also found popular by the host country’s population.


The presentation was followed by a panel discussion moderated by Daphne JAYASINGHE from the IRC. Felix OKECH, WFP, first took the floor by underlining that the financial services available to the refugee population in Kenya are still restrictive, as the case of M-PESA shows. The basic objection to refugees in Kenya accessing mobile money revolves around the government’s concerns around security, explained Okech after a question from the audience. Also, financial service providers of mobile money have been really tightening their approach, he continued, with maximum amounts of money transferred per day and ownership restrictions.

Okech stressed that, although the environment is difficult from a regulatory perspective, both financial service providers and humanitarian actors need to be creative in what ís possible. And there are some successes there, because WFP managed to provide electronic vouchers through the mobile money platform. Apart from formal credit systems, Okech continued, you see that refugees are extremely creative, and get well-organised to get their own internal arrangements and systems to access credit. Nevertheless, he also highlighted that the humanitarian communities need to play a more active role in providing access to credit to the refugee population. Also, in terms of regulatory issues, there needs to be continued work on advocacy to open up spaces and increase access to equal mainstream services for host communities and refugees alike.

Erica VAN EEGHEN then explained what the Dutch development bank FMO is doing in Jordan in the framework of the NASIRA programme. Within this programme, FMO provides risk sharing facilities to local financial service providers to share credit risk of the loan portfolio of specific client segments which are perceived as higher risk. In addition to credit, the programme also provides additional support, such as capacity building and networking activities.

Van Eeghen explained that these risk-sharing facilities came about after diligence research was conducted by organisations on the ground and displaced groups themselves. Based on research findings, specific criteria were defined to ensure that those that receive credit are really bankable or credit-worthy. The focus is on entrepreneurs with an income generating business, which are able to show some track record. Zademach underlined the importance of the work done by FMO, yet also pointed out that this group is a rather small percentage of all FDPs.

The NASIRA programme has shown that most FDPs that are considered credit-worthy live outside refugee camps, thus are already more integrated into the host community. Another learning from the programme is that financial institutions themselves face more and more difficulties in serving displaced persons. These institutions are often hampered by the minimum requirements to onboard these clients, as the national central bank requires documentation which refugees often do not have.