ILO at the European Microfinance Week 2024: Advancing Financial Inclusion for Forcibly Displaced Persons and Host Communities

The International Labour Organization's (ILO) Social Finance Programme had a prominent presence at this year's European Microfinance Week (EMW), organized by the European Microfinance Network in Luxembourg from November 13 to 15, 2024. The event brought together policymakers, financial institutions, development agencies, and innovators to explore how financial inclusion can empower forcibly displaced persons (FDPs), refugees, migrants, and host communities.

Tackling barriers to the financial inclusion of refugees and FDPs

The plenary session, "Advancing financial inclusion for refugees and FDPs," provided a stark reminder of the challenges faced by over 123 million FDPs worldwide, including 73 million internally displaced persons (IDPs) and 50 million refugees. Craig Churchill, Head of the ILO's Social Finance Programme, was joined by Diana Fiodorov (IRC), Micol Pistelli (UNHCR), Suzanne van Ballekom (WFP), Ricardo Garcia Tafur (IFC) and Diana Salume (Opportunity Bank Uganda). Together, they explored pathways to overcome systemic barriers that prevent FDPs from accessing formal financial services.

"Displacement is often not temporary. Most refugees spend decades in exile, yet financial systems often fail to recognize their potential as clients," Craig explained. He later outlined a three-pronged strategy to improve access to financial services for FDPs:

• Creating an enabling environment by addressing systemic barriers and advocating for policies that allow FDPs to access financial systems using refugee IDs and that address bureaucratic challenges like Know Your Customer (KYC) requirements.
• Strengthening financial education and business management skills to empower FDPs to use financial services effectively.
• Providing technical support to Financial Service Providers (FSPs) to adapt their products, processes, and workforce to serve FDPs, starting with basic services like payments before expanding to savings and credit.

Advancing financial inclusion for forcibly displaced persons is not about creating one-size-fits-all solutions. It's about understanding their unique journeys and needs and creating tailored, scalable opportunities that promote resilience.

Craig Churchill, Head of the ILO's Social Finance Programme

Uganda: A blueprint for refugee financial inclusion

During a two-part deep dive session named "Inclusive finance for forcibly displaced people: A deep dive", Yousra Hamed, Financial Inclusion Specialist at the ILO, led a discussion on Uganda's pioneering approach to refugee financial inclusion, alongside experts from Grameen Credit Agricole Foundation, Opportunity Bank Uganda and Bondeko, a refugee-led organisation in Uganda. As the largest refugee-hosting country in Africa with 1.7 million refugees, Uganda's progressive policies, such as the Refugee Act of 2006, provide a unique foundation for inclusion, granting refugees access to work, education, and financial services.

Experts explored the evolution of financial needs among refugees - from survival to resilience - and the opportunities for fostering entrepreneurship within refugee communities. They highlighted the critical role of Village Savings and Loan Associations (VSLAs) and financial guarantees in addressing barriers such as the lack of formal collateral.

Key examples, such as the partnerships between FSPs and refugee-led organizations, showcased the importance of community-driven approaches in scaling successful models to other contexts.

Leveraging insurance to stabilize remittances

Pranav Prashad, Senior Technical Officer at the ILO, contributed to the panel "Protecting migrant workers: Insurance solutions for remittance stability" together with experts from AXA EssentiALL, Access to Insurance Initiative, the Microinsurance Network and a representative of refugees awaiting international protection status in Luxembourg. As remittances remain a vital lifeline for millions of families, Pranav highlighted the untapped potential of integrating insurance into these financial flows.

He pointed to successful models where life and health insurance are bundled with remittance services, providing a safety net for senders and recipients alike. Simplifying claims processes, leveraging digital platforms, and educating communities on the value of insurance were identified as key strategies to build trust and drive adoption.

These are not just financial transactions; they are lifelines. By integrating insurance into remittance flows, we can provide migrants and their families with greater security and resilience.

Pranav Prashad, Senior Technical Officer at the ILO's Social Finance Programme

Technology and data in financial inclusion

A recurring theme throughout the event was the role of technology and data in advancing financial inclusion. In a session led by MFR and Oikocredit, panellists highlighted the use of tools like ATLAS, an automated data reporting system powered by machine learning, to reduce the reporting burden for financial institutions and improve trend analysis.

Sajida Foundation and Hishab Technologies showcased a pilot project in Bangladesh where AI-enabled chatbots in Bengali provided transaction updates and resolved disputes. While the system increased trust and customer engagement, the pilot revealed challenges in balancing automation with the human-centric needs of underserved clients.

Representatives from Musoni demonstrated how AI can assist loan officers in decision-making by providing credit scores and explaining the logic behind recommendations, helping to build trust in the technology.

Innovating for sustainable impact

The ILO's participation at the EMW also reinforced the importance of coordination, partnerships and innovation in tackling the pressing challenges of financial inclusion. Across all sessions, recurring themes were the need for:

• Blended finance mechanisms to scale pilots and bridge investment gaps.
• Flexible technical assistance to help financial institutions adapt their models for vulnerable populations.
• Inclusive policy advocacy, ensuring FDP voices are represented in financial sector reforms.

The discussions also explored broader opportunities to integrate gender equity, climate resilience, and digital transformation efforts to advance the financial inclusion of refugees.

Looking ahead

The ILO's Social Finance Programme continues to play a leading role in shaping the global conversation on financial inclusion for forcibly displaced persons and marginalized communities. As the world grapples with rising displacement due to conflict, climate change, and economic instability, the ILO's expertise and commitment remain critical to ensuring no one is left behind.

We must move beyond fragmented approaches. It's about creating ecosystems that connect refugees, host communities, and financial service providers in ways that are inclusive, innovative, and sustainable.

Yousra Hamed, Financial Inclusion Specialist at the ILO's Social Finance Programme

With impactful collaborations and a forward-looking agenda, the ILO is poised to drive lasting change in financial inclusion for those who need it most.

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