Advancing financial inclusion for the displaced
In mid-2021, UNHCR reported that more than 84 million people were forcibly displaced across the globe. This includes nearly 27 million people who crossed borders and were registered as refugees but excludes those displaced by the war in Ukraine or other recent crises and conflicts.
Peoples’ ability to move with their financial resources and access ongoing financial support and services in times of conflict or natural disasters is essential. While progress has been made toward securing financial access for forcibly displaced persons (FDPs), they often face policy, legal and regulatory barriers when they seek to use formal financial services.
Even if their status is recognized in the country of migration, it is not always sufficient for them to open financial accounts or register SIM cards to use mobile services. This financial exclusion inhibits their ability to access more complex formal financial services like credit, loans and insurance, which can help them rebuild their livelihoods and engage in economic activity to support themselves in host countries.
To help countries assess where they are and look for reference examples of how to create financial inclusion for FDPs, Strategic Impact Advisors (SIA) helped the Alliance for Financial inclusion (AFI) create a new data depository focused on FDPs, which is now included in AFI’s Data Portal. The FDP Depository captures policy frameworks, laws and regulations related to the financial inclusion of FDPs in 33 AFI member countries. Together, SIA and the Kozolchyk National Law Center conducted desk and survey research to populate the initial data entries in the depository. We hope AFI members will continue to contribute to the FDP Depository and that policy and legal frameworks continue to evolve.
With the launch of the FDP Depository in March 2022, AFI published a report that provides a synthesis of data collected, which includes key findings around FDP status and identification, access to formal financial services, and the broader economic participation rights of FDPs across countries surveyed. As conflict continues to force people to make the difficult choice of staying or leaving home, reforming policies to permit the use of financial services can help FDPs find security while supporting economic growth in their host countries.