Access to loans, savings, and insurance is vital to help displaced people become more financially resilient and allow entrepreneurs to build businesses and create jobs. But many displaced people are unable to meet certain requirements, such as providing an acceptable form of ID. Moreover, many formal finance institutions are reluctant to extend finance to refugees, who are seen as a burden, rather than contributors to the local economy. While there is considerable financing provided to micro-finance institutions (MFIs), we find that this is still largely not available to the most vulnerable and displaced people.
To address these shortcomings, DRC is working with partners to develop a blended fund that can improve financial access for displaced communities. The fund aims to support financial access for displaced people across East Africa through catalytic grant-funded programs, while providing options for donor-backed or commercial guarantee products, and access to new customer segments for financial institutions.
We are working with banks and other partners to design appropriate guarantee facilities and redesign financial products to make them more accessible to displaced persons. We also work with local partners and self-help groups set up by communities to improve their business capacities and financial literacy.