refugees

Kicking off e-MFP’s annual series of guest blogs on this topic, Ed Fraser, a consultant supporting the EMA team, describes the scale and complexity of the displacement challenge, the barriers faced by the forcibly displaced, and introduces the role(s) that the financial inclusion sector can play, and argues for a collective approach, an ‘imperative’, that leverages what various stakeholder groups can offer in serving these groups.

“Refugee microfinance” is too risky, right? After all, refugees are more likely to default on their loan because they don’t have ties to the local community or profit-generating enterprises. They are likely to rejected by existing clients as “competition” or simply as outsiders. Refugees’ lack of collateral and their unstable legal status give them little incentive to develop a long-term relationship with the financial service provider (FSP). Right? Not necessarily. In fact, quite the opposite has been true for Al Majmoua, a Lebanese microfinance institution (MFI) serving Syrian, Pilipino, and Palestinian migrants and refugees (in addition to low-income Lebanese clients).