Micro Finance With Refugees

Speaking to some of RIO’s micro loan recipients at the Krisan Refugee Camp

On the topic of financial independence for refugees (and other Persons of Concern [POCs]), the ideal solution may not be entrepreneurship, as has been globally acclaimed, or even savings and lending services, as has been more reservedly utilised. Rather, the ideal solution may be a blend of those two approaches working in tandem.

Apart from political and policy complications from certain refugee host nations, geographical restrictions, or the lack of adequate infrastructure, etc., one major roadblock to helping refugees become economically independent is the dependency on aid, especially in the form of refugee camps, which incorporate services that meet refugee needs and are usually funded by large organisations and governments.

Aid and the refugee camp structure is not a sustainable method of financial inclusion or integration; it was meant as a short-term solution until refugees could return to their countries of origin. Refugee and displacement issues are not getting better; they are on the rise, and more innovative ways will be needed to cater for many of them as the process of receiving aid from donor organisations and governments is not the most suitable method.

Imagine a setting where aid that would originally have been spread across a refugee camp would be dedicated solely to the refugees who are children, the aged, or in need of medical attention — in short, refugees who are unable to work for tangible reasons. It would mean saving funds to be used to help such refugees in other settings.

The question now would be how do we create a refugee community beyond aid — one that utilises the remaining population of refugees who are well and willing to work?

In several situations, when we hear about refugees, the assumption is that they are naturally dependent because they have no skills. It is important to recall that refugees are people who had lives, jobs, and responsibilities before they became displaced. This, creating a refuge community beyond aid is not a reinvention of the wheel, as the solution has in fact been implemented either in independent situations, in non-refugee settings, or on a much smaller scale.

The Proof in Numbers

To arrive at a place where this method is successful on a wider scale, simple assessments are necessary. We know from history and statistics that only a small percentage of refugees will return to their countries.

Kiva’s refugee and IDP portfolio by the numbers

On the left, we see Kiva’s refugee and Internally Displaced Persons (IDP) numbers on the success of no-interest funds.

As a rule, not everyone who is able to work wants to do so. Not everyone will become an entrepreneur, and not everyone will work well with money on the condition of starting a business. In light of this, pre-programme assessments are important for successful applications. The assessments may include:

The Windmill Refugee Loan Program, which is a character-based community lending programme, exhibits success in this even though collateral is not required.

In countries where refugees are permanent or long-term residents, and where they have the right to work and own properties, for example, the blend of enterprise and access to low or no-interest funds would be most opportune as a more sustainable solution to financial independence. Refugees who, by default, have come to be financially dependent, are feasible and tested candidates for this sort of trust and character-based funding because they seldom have collateral to submit for funding.

Yunus, Venezuelans, and the Solution

Professor Mohammed Yunus and his Grameen Bank have a process out of (extreme) poverty., which is also more effective than individual entrepreneurship or business training and self-funding. Recently, due to the crash of the Venezuelan economy, an estimated 2.3 million Venezuelans (7% of the population), according to the UN, have fled the country; most of them to neighbouring Colombia. What would the economic independence solutions be for these migrants who very well need to be fed, housed, and otherwise cared for, especially considering an estimated 4 million Venezuelans may live in Colombia by 2021?

The necessity of the need for innovation and a different sort of thinking in this field of integration and economic development has become jarringly apparent. The interrelation between the 6.3 million Syrian refugees, the 2.4 million South Sudanese refugees, and the 2.3 million Venezuelan migrants, for example, is the fact that they are people who possess useful skills and need to be economically integrated.

As of 2017, the UNHCR’s Global Trends Report recorded an estimated 70.8 million forcibly displaced people, telling us ever more lucidly that our solutions need to be able to reach more people in a shorter period, while retaining effectiveness. The graph below sheds more light on the number of displaced people from 2009 to 2018.

UNHCR Global Trends Report, 2018

Implementing the fusion of micro-credit and business in applicable refugee and migrant settings would remove the donor-funding burden from refugee and migrant-focused organisations like the UNHCR and the IOM, as well as governments who are also financially involved.

The present go-to methods of camps, skills training, and small-scale donor-funding for small numbers of refugees, or migrant initiatives for long-term or permanent residents, are no longer the most effective because of the terrible rise of displaced people around the world.

This “new” approach has already been piloted by the likes of the Grameen Bank, RIO (Refugee Integration Organisation), Kiva, and the Windmill Micro-Lending company. By exponentially implementing this, we would not be reinventing the wheel — we would simply be expanding it.


Rya G. Kuewor,

Founder and Executive Director, RIO (Refugee Integration Organisation)

Refugee economic integration consultant | Speaker: AU, WEF, UN-IOM | WEF Agenda Contributor | Amani Institute | ✝️ Co-Founder, Refugee Integration Organisation