Advancing access to financial services for refugees (Part II): Panel 3: Digital solutions to expand access and lower costs

  • Alexandra SÁNCHEZ, PHB Development
  • Speakers
  • Katharina BRAUN BOTAO, GIZ - Jordan
  • Pamela ESER, UNCDF

    Alexandra SÁNCHEZ introduced PHB Development, a consultancy in digital services for financial inclusion. She stated that empowering refugees in (re)building their livelihoods requires access to finance. Traditional tools and systems are not sufficient to meet their different needs, to tackle regulatory issues, and to overcome access issues (to refugees, or for refugees). This session looked at mobile and digital tools and ecosystems for financial inclusion for refugees and other migrant populations.

    Katharina BRAUN BOTAO talked about DIGI#ANCES, a project improving access to remittances through digital solutions in Jordan. This GIZ project, implemented with the Central Bank of Jordan, lays the foundation for the use of digital services for cross-border remittances by refugees and Jordanian households lacking access to financial services. The results of two CGAP studies showed only small differences between low-income Jordanians and Syrian refugees (mostly in terms of income and bank accounts) and that remittances are used similarly, mostly for regular family upkeep, emergencies or health issues. Investing in business was very rare. Braun Botoa showed the price difference between different sending and receiving corridors and indicated that in general prices might be higher for corridors relevant for low-income households.

    The project works on the digital remittances ecosystem, including regulatory enhancements and the development of an agent network, as well as directly with financial literacy measures for refugees and low-income Jordanians. The partnership with the Central Bank is key in working towards a more enabling regulatory and supervisory environment for digital finance. On the refugee level, the project worked on raising awareness and training on digital financial services and literacy. Overall the project aims to contribute to SDG 10 “Reducing Inequalities” by reducing the transaction cost of remittances to less than 3% by 2030.

    Pamela ESER explained UNCDF’s goal: to empower vulnerable people to lead productive and healthy lives by expanding access to and usage of digital services that contribute to achieving the SDGs. She presented two projects. On Cash Based Intervention (CBI) Digitization in Zambia she explained how their partnership with UNHCR, providing beneficiary details, the Standard Chartered Bank making payments, and Airtel (setting up agent networks, providing training to beneficiaries) shortened the CBI disbursal process, reduced costs to UNHCR and reduced fraud and theft. In Uganda the impact was mainly in the enabling environment with improved mobile access, network towers placed, agent networks established, and financial and digital training. Challenges included the lack of a MNO business case without subsidies, refugees being digitally disenfranchised by legislation, low phone penetration among women, low/irregular network coverage and limited payment options making digital currency less attractive. A key learning point was a strong need for training and awareness raising and the importance of partnerships. 

    On savings groups, digital literacy and tablet and app-based financial education in Tanzania, Eser stressed the restrictive refugee policy in terms of mobility, employment and IDs. This comes in addition to other challenges such as access to land and electricity. She indicated that there are saving groups and women centres, some economic activity and a first pilot with IDs for refugees that could be leveraged. The project objective was to deepen access to finance for refugees through savings groups, and digital linkage of groups to FSPs. This was done through strengthening savings groups and financial and digital literacy using mobile money simulators -a game-based approach to learn how to manage money, and face-to-face modules. 

    She ended her presentation by briefly referencing a USD 50 million UNHCR-UNCDF joint programme to financially include forcibly displaced populations and host communities as well resources available on the UNCDF website.