Refugees and Their Money: The Business Case for Providing Financial Services to Refugees

BFA Global

FSD Africa, 2018


This study assesses the demand for financial services in refugee populations in Rwanda and estimates the business case for financial institutions to provide these services. The report makes the case that refugees have a strong need for comprehensive financial services to support their livelihoods including: (a) savings or transaction accounts to safely store income and minimize theft; (b) loan products to support business ventures and meet other personal needs; (c) insurance to minimize the financial impact of unpredictable events; and (d) convenient access to channels to receive remittances. The demand for financial services has increased as World Food Programme (WFP) in Rwanda transitions from in-kind food assistance to cash grants.

The report is based on four research activities: (i) segmenting and sizing refugees by their sources and amounts of income; (ii) translating the segments into business cases to assess potential for serving this market; (iii) creating profiles of segments based on field research in refugee camps (refugees with salaried jobs, refugees receiving remittances, self-employed refugees, refugees receiving cash transfers only); and (iv) assessing the regulatory environment to provide financial services for refugees. Key findings include:

  • Most refugees in Rwanda receive cash assistance. Refugees in six of seven refugee camps receive cash assistance, and the remaining camp, Mahama, is expected to transition to cash assistance by the end of 2018.
  • Refugees in Rwanda have enough income to be potential customers for financial service providers (FSPs). 90 percent of refugee households report monthly income above RWF 25,000, the median for a Rwandan bank account holder. There is evidence that cash transfers help to build other types of income.
  • Extending financial services to refugees in Rwanda would expand the market for financial services by an estimated 44,000 individuals.
  • Many refugees have used financial services before and there is significant untapped demand for savings, transaction, and loan products.
  • Refugees have as much potential to generate profit for FSPs as typical low-income Rwandan customers. Refugees who own a small business, earn income from odd jobs, or have a salary income could be a profit-generating segment for FSPs. Refugees who only receive cash transfers may not immediately present a profitable proposition, but there is potential to cross sell these customers an insurance policy or a loan if they begin a business or start a salaried job.
  • One of the biggest challenges refugees face in accessing financial services is satisfying the ID requirement for ‘know your customer’ (KYC) purposes. A directive from the National Bank of Rwanda that lists Proof of Registration issued by MIDIMAR as valid KYC documentation would make it easier for refugees to satisfy KYC requirements.