Image credits: American Refugee Committee
The American Refugee Committee (ARC), through their microfinance work in West Africa, developed a model for providing financial services to refugees and people displaced by conflict and natural disaster. Refuge to Return (R2R) is a stepped model which allows for education, development of credit and savings, and long-term support for this vulnerable and underserved population.
The United Nations High Commissioner for Refugees reports an unprecedented 65.3 million people worldwide displaced by conflict or natural disaster, with 21.3 million refugees. Half of these refugees are under 18. This population has little access to financial services, limiting safety and self-reliance.
ARC’s goal with their R2R initiative was to build resilience through microenterprise in vulnerable displaced populations with little credit, savings, or insurance, and in those suffering loss of assets, community support, and personal and business history. ARC also wanted to develop systems which would offer long-term support for sustainable microenterprise when these refugee populations resettled or returned home. The usual tools for client assessment and incentive structuring were not workable in the refugee camps. Financial products like savings and insurance took a backseat to clean water and safety.
Refuge to Return’s stepped approach is based on adapting the microfinance product and service to meet the particular vulnerabilities of the population. While first displaced, moving, or in camps, R2R uses education, grants, and small loans to build capacity. People who complete the education and repay their loans fully receive a certificate with their name, loan information, and credit rating. This certificate travels with them. In their country of return, MFIs offer increased monitoring and mentoring to returning refugees, with preferential access to those with an R2R certificate. When people resettle, long-term sustainability once again becomes a workable goal.
Timothy Nourse, as part of USAID’s Accelerated Microenterprise Advancement Project, detailed operational lessons in implementing Return to Refuge.
The challenges that face populations of refugees and displaced people living in conflict zones have significantly limited their access to microfinance credit, savings, and insurance. The Refuge to Return program is a successful model for working with these vulnerable populations.