Banking on Refugees
Refugees have long been excluded from financial services, leaving them struggling to integrate into host economies. But new technologies have made the lack of an identity card, loan collateral, or a fixed address irrelevant, and the world's displaced people may be only the first to benefit.
KAMPALA – Every minute, on average, 31 people are displaced – forced to leave their jobs, homes, and even their families. These refugees often arrive, after arduous journeys, in new countries with no money or identification, and few possessions. Yet, far from securing a safer, more prosperous future, they often find themselves marginalized, excluded, and even demonized, denied opportunities to integrate into their host societies or contribute to the local economy. One straightforward way to empower refugees is to give them access to financial services.
Financial service providers (FSPs) have long neglected this population, owing to accessibility and identification challenges, together with perceptions of refugees as a high-risk group. But technological advances in the last decade have made providing financial services to refugees easier, safer, and more cost-effective than ever.
Thanks to digital and mobile technologies, banking no longer happens primarily in brick-and-mortar branches, but rather on people’s phones, wherever they are. This has facilitated the rise of digital wallets that enable users to receive, store, and spend money using only their phones. In recent years, mobile money has become wildly popular in Sub-Saharan Africa in particular, and it can be a game changer for the world’s massive unbanked population – 1.7 billion people – two-thirds of whom already own a mobile phone that could act as a gateway to financial services.