In the context of the German G20 Presidency, a High-Level Forum on the Financial Inclusion of Forcibly Displaced Persons (FDPs) was co-organised by the Global Partnership for Financial Inclusion (GPFI) and AFI on 26 April, preceding the GPFI Forum and Plenary that will take place this week. The issue is one of Germany’s four key priorities under its G20 Presidency and as an implementing partner of the GPFI, AFI undertook research in the area and its findings were presented and discussed at the forum.
Held in Berlin, Germany the forum convened more than 70 participants comprising of representatives from a diverse range of stakeholders specifically financial regulators and policy makers, humanitarian and development agencies, FinTech actors, private sector partners, and academia. Unprecedentedly, AFI and GPFI members engaged in dialogue with partners from different sectors to begin addressing the issue of the financial inclusion of FDPs through discussing common challenges and potential solutions. The application of the Chatham House Rule ensured an open and productive dialogue throughout the forum, especially considering the political complexities of the issue.
Indeed, the main objective of the forum was to gather a wide set of relevant countries and stakeholders to elevate the importance of the issue both in the global dialogue on financial inclusion through the G20 and as part of holistic national financial inclusion strategies which aim to include the most vulnerable and underserved populations within affected countries.
The forum was opened with welcome remarks that highlighted the importance and urgency of the financial inclusion of FDPs during a time when the global forced displacement crisis is drastically affecting developing countries and their emerging markets. One of the AFI members present highlighted that AFI’s initiative to undertake a study and convene a forum on this issue triggered a dialogue among relevant stakeholders in-country on the ways in which refugees residing in their country can be included in the national regulatory framework.
The first session set the scene for the rest of the day by providing context on what recent developments in this area are, and how it is not just a humanitarian issue, but also a development one. Panelists stressed that development gains will be more easily achieved if the financial inclusion of FDPs is addressed and advancements towards the Sustainable Development Goals (SDGs) can be reversed if FDPs are not economically empowered. Panelists representing humanitarian agencies noted that in many countries facing the forced displacement crisis, such as Uganda, refugees do require access to adequate financial services and financial regulators and policymakers play a significant role in creating an enabling environment towards this end.
The AFI Special Report on the Financial Inclusion of FDPs was presented in the second session which was aptly titled, “What Works? Financial Inclusion of FDPs and the Role of Financial Regulators – Cases and Findings from the AFI Special Report.” 13 AFI member institutions participated in the study and it was revealed that even though they did not have any regulatory frameworks in place to financially include FDPs, they agreed that the forcibly displaced need to be considered in National Risk Assessments (NRA) and also financial inclusion strategies.
The presentation of the findings from the AFI Special Report concluded with the detailing of a Road Map for addressing the issue which reiterates that moving forward, AFI members would play a facilitating role in the financial inclusion of FDPs. This is including through support for peer to peer learning among AFI members on how to approach the issue, and also with regulators and policymakers who have more extensive experience in the area. The Standard Setting Bodies (SSBs) particularly the Financial Action Task Force (FATF) were mentioned as key partners to engage, and will be a great resource in matters concerning tiered KYC and simplified due diligence.
Further, panelists mentioned a need to raise awareness and build the capacities of regulators and policymakers to begin addressing the financial inclusion of FDPs. It was noted that the two main challenges of financially including the forcibly displaced are identification (in the case of refugees) and low levels of financial literacy. A panelist representing the European Union asserted that members of the union have a state obligation to provide financial access to refugees, and financial education is essential to empower them to claim this right to access.
In the third session, panelists from the private sector including AFI’s Public-Private Dialogue partners provided insights into how they have implemented activities to financially include FDPs. In addition, the potential of digital financial services and FinTech to complement efforts by regulators and policymakers was noted. The FinTech sector can be a collaborator in overcoming the challenges of financially including FDPs such as identification barriers through the use of biometric identification.
The fourth session’s main objective was to provide a summary of the day, highlighting themes and priorities emanating from the outcomes of all three previous sessions. This highly interactive session synthesized recommendations that will be presented at the GPFI Plenary this week, and will subsequently be considered by the G20 countries. It was importantly stressed that the recommendations would propose that FDPs be an official “vulnerable group” in the global dialogue on financial inclusion and as such financial inclusion strategies will need to take them into account and efforts must be made to tailor certain components of strategies to their financial needs.
The high-level keynote address given later in the evening encouraged the continuation of efforts to financially include FDPs, especially through strong collaboration between the diverse stakeholders who play relevant roles in addressing it, much like at this forum.
The forum closed with remarks from AFI and BMZ as co-organisers, whereby participants were sincerely thanked for a productive forum.