Financial Inclusion of
Forcibly Displaced Persons

Financial Inclusion of
Forcibly Displaced Persons

Forced displacement is one of the most pressing challenges of our time. With the number of forcibly displaced estimated at nearly 71 million in 2018, the scale of the crisis is impeding progress towards achieving UN Sustainable Development Goals as well as commitments to “leave no one behind”. The protracted and complex nature of forced displacement requires that urgent life-saving humanitarian support be complemented by development action.

Financial inclusion empowers forcibly displaced persons (FDPs) to cope under extremely difficult circumstances while also meeting their broader, long-term financial needs. Access to formal financial services creates conditions for FDPs to establish coping mechanisms, build self-reliance and resilience, apply their skills and competencies, restore their livelihoods, and realise their full potential. In turn, they can contribute to the economic growth of their host country, voluntarily return home or resettle in a third country.

Specific challenges in advancing policy and regulation for the financial inclusion of FDPs include:

  • Limited data on FDPs and their financial needs, for example, Global Findex does not include financial inclusion data on FDPs.
  • National risk assessments and national financial inclusion strategies often exclude FDPs.
  • FDPs lack acceptable identification to satisfy Know-Your-Customer requirements that comply with global anti-money laundering and countering the financing of terrorism (AML/CFT) standards.
  • Financial service providers do not view FDPs as a viable client segment.

AFI supports peer-to-peer learning on financial inclusion initiatives that can offer the same opportunities for FDPs as other country residents but only when adapted and applied appropriately. Successful programs and best practices indicate that it is necessary to tailor approaches while taking the FDP context into account and adding complementary services where needed.

Financial policymakers and regulators in emerging economies are taking significant steps to adopt innovative regulatory approaches in order to financially include FDPs. In the past year, several AFI members, such as Central Bank of Mauritania, Da Afghanistan Bank and National Bank of Rwanda, implemented policy and regulatory reforms that enhanced access to formal finance for FDPs living within their jurisdictions. This is in addition to efforts by other members, including Bank of Tanzania, Bank of Zambia, Bank of Uganda and Central Bank of Jordan, which have championed this issue for several years now.

Snapshot of the Forcibly Displaced Persons activities within AFI:

2016 2017 2018 2019
Events and/
or Sessions
GPF session
The long road travelled – Inclusive Finance for Refugees
GPF session
Transforming the lives of Forcibly Displaced Persons (FDPs) through financial inclusion
GPF session
Digital Identity – A Financial Inclusion Revolution for the Most Vulnerable Populations
GPF session
Technology is the Key to Youth Financial Inclusion
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Personis forcibly displaced
every 2 seconds
of the world’s forcibly displaced are in developing

Why can’t FDPs access formal finance?

FDPs are often excluded from National Financial Inclusion Strategies (NFIS)
FDPs lack acceptable identification to satisfy Know-Your-Customer (KYC) and Customer Due Diligence (CDD) requirements to comply with global Anti-Money Laundering and Countering Financing of Terrorism (AML-CFT) standards
Financial service providers do not view FDPs as a viable client segment
Limited data on FDPs and their financial needs
Insufficient financial infrastructure in host countries particularly in refugee camps.

The role of the financial regulator

Financial regulators and policymakers can drive, influence, and facilitate efforts to design and offer formal financial services to FDPs by creating an enabling regulatory environment that fosters innovation yet still ensures sound compliance.

Coordinate with relevant actors to collect data on FDPs and their financial needs
Integrate FDPs into NFIS.
Include FDPs in National Risk Assessments (NRAs) towards implementing simplified CDD for low-risk FDPs
Collaborate closely with key ministries, global and regional standard setting bodies, development and humanitarian agencies, civil society organisations, and the private sector
Improve FSPs’ negative perception of FDPs
Create a regulatory environment to enable FinTech solutions that comply with global standards for financial integrity, stability, and consumer protection.
Adopt digital technologies such as biometrics to substantially improve compliance, cost-efficiency, and accountability for the financial inclusion of FDPs.


© Alliance for Financial Inclusion 2009-2022