Smart Communities: Using digital technology to create sustainable refugee economies
The size and longevity of many refugee camps across the world are indicative of the permanent rather than transient nature of displaced populations. With more than 65 million people currently displaced from their homes due to political conflict and natural disaster, there is a growing need to find better ways for refugees to achieve self-sufficiency and serve as economic engines in their host countries. However, the financial infrastructure in these communities, particularly in banking, payments and remittances, remains inadequate. With no end in sight to mass displacement, the current approach is neither sustainable nor reflective of our responsibility to these communities.
This report combines the strategic and data-driven research expertise of Mastercard and Western Union to detail the current state of refugee settlement economies and set out a plan to improve financial service delivery. Key findings include:
• Qualitative research conducted at two of Kenya’s most high-profile settlements uncovered the complexity of financial needs and identified three resident segments: Impoverished new arrivals with limited access to funds; Intermediate residents who have been in the camps for some time and thus have a small network and social support; and Economically active residents who participate in trade within and outside the camp.
• Refugees and locals interact with a diverse set of stakeholders for their daily needs. Despite limited formal options, refugees lead complex financial lives, taking advantage of tools and services that allow them to progress.
• A newly announced digital infrastructure model – focused on mobile money, digital vouchers and cardbased solutions – will promote the self-reliance of refugees and host communities. It will serve as a scalable blueprint for underserved populations to access formal financial services, encouraging the growth of an integrated and sustainable local economy.