Regulators offer durable solutions to include FDPs

Forcibly displaced persons (FDPs) must be part of efforts to accelerate financial inclusion, despite COVID-19 pressures shifting focus towards meeting the needs of local populations, speakers said during a webinar on 23 June.

AFI Executive Director Dr. Alfred Hannig encouraged regulators to ensure support for FDPs at this globally challenging time, explaining that systematic inequalities within the formal financial system meant that vulnerable groups risked being left behind.

“We need to challenge these tendencies towards isolationism [as] this is a global problem that requires global cooperation in all our shared interested,” he said.

AFI members have demonstrated collective commitment to ensure that FDPs are not left behind, Dr. Hannig said, through their endorsement of the Sochi Accord and the Kigali Statement, both of which explicitly mention FDPs.

More than 100 representatives of AFI member and partner institutions took part in the webinar, which was co-hosted by Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) and AFI. Among them were Better Than Cash Alliance, GIZ, International Rescue Committee (IRC), which recently collaborated with the hosts on a landmark roadmap on the financial inclusion of FDPs that formed the basis of the discussions. Launched in late 2019 the roadmap outlines key policy recommendations for stakeholder involved in the financial inclusion of FDPs.

BMZ Senior Policy Officer Linnea Kreibohm described the roadmap as an “important first step” in helping guide news ways of collaboration and concrete actions towards improving the lives of those who have been forcibly displaced. BMZ is a key partner in AFI’s work on FDPs and several other financial inclusion areas, including digital financial services and financial technology in Africa.

Reflecting this close collaboration, Kreibohm emphasized the importance of strategic cooperation in driving forward real change, saying that the “financial inclusion of FDPs contributes to improving people’s livelihoods and their ability to participate economically”.

“Especially now, we have seen that people need ways to safely receive cash assistance and remittances and save and prepare for future crises,” she added.

The virtual event was held less than a week after World Refugee Day, an international day that raises awareness of the plight of refugees who have fled persecution, conflict, violence and human rights violations. Dr. Hannig and BMZ’s Kreibohm marked the day with a blog that highlighted the need to provide legal pathways for FDPs to participate in the economy and contribute to the socio-economic development of their host community.

Translating pledges to the vulnerable populations into visible change is National Bank of Rwanda (BNR), which is among a handful of AFI members to include refugees in their national financial inclusion strategies (NFISs).

As host to nearly 150,000 refugees, BNR’s Moise Bigirimana provided Rwanda’s experiences. He noted that while his government upholds legal measures to protect and advance the rights of refugees across the country, many challenges remain including the limited access of FPDs to loans, land for farming and market-based vocational training and financial education.

Stakeholder collaboration, he added, has helped address many of these issues, most recently with Rwanda’s Ministry of Emergency Management and UN Refugee Agency (UNHCR) pairing up to complete the registration of “all refugees” in Rwanda, thereby providing them with documentation that supports employment, freer movement and access to financial services.

Innovative technologies, Bigirimana told participants, were also making headways with FDPs staying in some camps receiving cash transfers from UNHCR through mobile money account.

Outlining progress being made within another AFI member’s jurisdiction was Swati Mehta from Catholic University Eichstätt, who gave details of her institution’s program in Jordan aimed at strengthening the financial lives of refugees by addressing data and evidence shortfalls.

She noted that while the Central Bank of Jordan had identified FDPs as an key stakeholder, many non-Syrian refugees remained excluded from relevant support systems.

“There is a need to look at all refugees and have a one refugee approach,” she said, adding that it was also essential to provide refugees with reliable ways to store and save money, especially considering that the usage and awareness of mobile wallet accounts remained low.

“For entrepreneurs, it’s important to look beyond mobile wallets and provide with refugees with a wider suite of products and allow them to use bank accounts to enable their businesses over the longer term,” she said.

AFI’s Mariam Jemila Zahari told the webinar that the member-driven network was working with the Banque Centrale de Mauritanie to integrate FDPs into their NFIS.

Sharing measures needed to ensure the safe delivery of digital financial services to FDPs, was Better Than Cash Alliance’s Tidhar Wald, who said that among the most crucial was an acknowledgement of their “very specific needs” and how they often lack financial safety nets.

Reflecting limited trust and financial literacy among FDP communities, he added that products must also be transparent and easily understood and that reactive recourse mechanisms were also crucial in case of transfer issues.

GIZ’s Lisa Klinger and Joscha Albert noted how enabling digital financial infrastructure to reach FDPs in rural areas and camps was becoming increasingly relevant amid efforts by authorities to promote physical distancing.

According to UNHCR, almost 80 million people were forcibly displaced due to conflict and persecution, of which at least 48 percent were women and girls. Recognizing the specific challenges facing women refugees, IRC’s Kelsey Weber noted that stakeholders must work on building trust, explaining that many communities “do not have full confidence that if they go to a bank or a banking agent that they will be treated the same”.

This, she said, was deterring vulnerable groups, particularly women and people with low literacy rates, from even wanted to gain access to financial products and services. In response, she added that IRC programs were helping build financial and digital literacy skills among target groups, including supporting them in basic administrative processes.

Chrissy Martin Meier, who acted as moderator, brought the event to a close by emphasizing how the financial inclusion of FDPs was currently more relevant than ever in helping build resilience among vulnerable groups. Through the roadmap, she encouraged regulators to look at how it could remain relevant through concrete actions and opportunities.

AFI’s Financial Inclusion of FDPs program is partially financed by BMZ, including in country implementation where technical assistance and other resources support members to accelerate the adoption of high-impact practical policies within their jurisdictions.