Financial & Economic Inclusion

FINANCIAL & ECONOMIC INCLUSION For Refugees in South Africa BY: UNHCR & THE BANKING ASSOCIATION SOUTH AFRICA - SEPTEMBER 2019

SA REFUGEES FINANCIAL & ECONOMIC INCLUSION

INTRODUCTION

FINANCIAL INCLUSION FOR REFUGEES IN SOUTH AFRICA #FinancialInclusion4All Three Inaugural Workshops were successfully held in Stellenbosch, Johannesburg andDurban on 16, 18 and 20 September 2019. UNHCR and The Banking Association South Africa convened the workshops.

The workshops took place on the backdrop of 2019 themed by the African Union as “The Year of Refugees, Returnees and Internally Displaced Persons:

Towards Durable Solutions to Forced Displacement in Africa”.

The overarching framework is the Global Compact on Refugees, which is a new international agreement to forge a stronger, fairer response to large refugee movements and protracted situations, , and the Comprehensive Refugee Response Framework (CRRF).

Presentations are communication tools that can be used as lectures.

SA REFUGEES FINANCIAL & ECONOMIC INCLUSION

REFUGEE NEEDS

REFUGEE NEEDS FOR FINANCIAL INCLUSION AT VARIOUS DISPLACEMENT PHASES:

Phase 1: Arrival; Phase 2: Initial Displacement; Phase 3: Stable/Protracted Displacement and Phase 4: Permanence.

Each phase of displacement calls for a different response in terms of financial needs and requirements and Financial Service Providers (FSPs) must be able to distinguish these phases.

Presentations are communication tools that can be used as lectures.

SA REFUGEES FINANCIAL & ECONOMIC INCLUSION

LESSONS LEARNT ON SERVING PoCs

There is need for collaboration of regulatory bodies and financial and banking industry players.

To look beyond financial inclusion to broader economic inclusion and the integration of PoCs in the economic mainstream.

Legislation must take into account transformation.

Department of Home Affairs and National Treasury are the key Government departments to provide an enabling policy environment to enable financial and economic inclusion of refugees.

SA REFUGEES FINANCIAL & ECONOMIC INCLUSION

LESSONS LEARNT ON SERVING PoCs There is no indication of a greater credit risk in granting financial services to refugees as the payment rates so far have been the same.

There is no need to create ‘new/niche products’ for refugees. FSPs have offered loans to national clients and refugees based on the same terms and conditions.

UNHCR data on the demographic and socioeconomic profile of refugees have helped the segmentation process.

UNCDF is to be engaged by UNHCR for technical assistance for scoping studies to better understand the financial profiles and needs of PoCs. Financial education and business support services is necessary for clients with no experience with microcredit and know-how on financial services.

Important to communicate the strategy of targeting refugees internally with the FSP staff, especially loan officer.

Nationality is not a helpful indicator of good performance as a client. FSPs must focus on legal residency and economic participation.

FSPs need to segment and target the less vulnerable which includes the PoCs. Strengthen advocacy efforts to enable financial and economic inclusion of PoCs. Draw on lessons learnt by pioneer/disruptor FSPs. Six preparatory steps for FSPs to expand outreach to include Foreign Born Residents (FBRs) and PoCs (source: Lene Hansen): Conduct a scoping/feasibility study Generate a strategy/concept Contact FBRs and PoCs and conduct market research Segment potential clients Adjust eligibility and appraisal criteria Conduct a pilot test

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SA REFUGEES FINANCIAL & ECONOMIC INCLUSION

CONCLUSION

FINANCIAL INCLUSION FOR REFUGEES IN SOUTH AFRICA #FinancialInclusion4All The workshops have built a solid foundation to build on the insightful discussions and proposed action points.

What came out clearly, was that these workshops must not be a once off occurrence and must be replicated elsewhere in South Africa and that concrete action plans must be the key deliverable of these advocacy workshops.

The sponsors of the workshop venues are greatly appreciated: Capitec Bank for Protea Hotel in Stellenbosch, Old Mutual in Sandton for the venue and all catering Ithala Development Finance Corporation for the workshop venue at Ithala Head-Office at Point Waterfront in Durban.

The 10 action points above aim to unblock hurdles and inhibitors of financial and economic inclusion of refugees, and to broaden and deepen access to financial services to PoCs.

WORKSHOP CONCLUSION “In order to develop more inclusive financial markets it is necessary to address the specific constraints in each context that prevent an efficient match between demand and supply of financial services, limiting access, use and quality of available services. While legal and policy barriers remain, the biggest constraint to increased financial inclusion of refugees is a familiarity gap between refugees and FSPs, fueled by ingrained stereotypes and preconceived ideas…” Lene M.P. Hansen, Independent Financial Inclusion Consultant – Author: Finance for Refugees: the state of play of August 2018.

SA REFUGEES FINANCIAL & ECONOMIC INCLUSION

#WithRefugees

We thank ALL participants and panelists for great insights at the workshops! The submission made on 21 May 2018, by Lawyers for Human Rights to The Banking Association South Africa, although over a year later, has culminated in these successful inaugural workshops on Financial and Economic Inclusion for Refugees in South Africa held in Stellenbosch, Johannesburg and Durban on 16, 18 and 20 September 2019. We are compelled to address the issues raised timeously, effectively and efficiently UNHCR through its Livelihoods and Economic Inclusion Unit and The Banking Association South Africa through its Financial Inclusion Division, in collaboration with other stakeholders.

VISIT www.unhcr.org www.banking.org.za

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