Access to Finance FORUM Reports by CGAP and Its Partners No. 12, April 2017 The Role of Financial Services in Humanitarian Crises Mayada El-Zoghbi, Nadine Chehade, Peter McConaghy, and Matthew Soursourian a We must return our focus to the people at the center of these crises, “ moving beyond short-term, supply-driven response efforts towards demand-driven outcomes that reduce need and vulnerability. To achieve that, international providers will need to set aside such artificial institutional labels as ‘development’ or ‘humanitarian’ working together over multi-year time frames with the Sustainable Development Goals as the common overall results and accountability framework.” Ban Ki-moon “Report of the United National Secretary General for the World Humanitarian Summit” (2016) This paper was funded by CGAP and the State and Peace-Building Fund (SPF), a global multi-donor trust fund administered by the World Bank Group to finance critical development operations and analysis in situations of fragility, conflict, and violence. SPF is supported by Australia, Denmark, Germany, the Netherlands, Norway, Sweden, the United Kingdom, and IBRD. This paper was written by a CGAP-World Bank Group team comprising Mayada El-Zoghbi, Nadine Chehade, Peter McConaghy, and Matthew Soursourian. It benefitted from contributions by Jamie Zimmerman and Nina Holle. The team would like to thank the internal peer reviewers from CGAP (Antonique Koning, Greta Bull, Juan Carlos Izaguirre, Michael Tarazi, Stella Hope Dawson, Steve Rasmussen), the World Bank Group (Jean Pesme, Leora Klapper, Stephane Hallegate, Samuel Maimbo), and the office of the United Nations Secretary General’s Special Advocate for Inclusive Finance for Development (Eric Duflos) for their valuable comments and suggestions during the peer review process. Feedback on earlier drafts was provided by Saskia Veendorp (independent consultant) and Craig Churchill (International Labour Organization). The team is grateful to Paul Bance and Zainiddin Karaev for operational support from SPF. Table of Contents Foreword iii Executive Summary 1 I. Why Explore the Role of Financial Services in Crisis Environments? 5 II. Insight into the Financial Lives of Crisis-Affected Populations 9 Demand for and use of financial products by crisis-affected people 9 Profiles of crisis-affected populations 10 Legal barriers complicating access to financial services in crisis contexts 12 Evidence on How Financial Services Support Crisis-Affected People III.  and Communities 15 Remittances help people cope with shocks and support economic activity 15 Access to savings increases resilience 16 Insurance and social protection can work together to reduce vulnerability 17 More research is needed on the role of credit for crisis-affected populations 17 Digital cash transfers can offer an entry point to financial inclusion, although more testing, operational roll-out, and evaluation is needed 17 IV. Barriers to the Delivery of Financial Services in Crisis 21 Policy environment 21 Physical and financial infrastructure 21 Donor Engagement 22 V. Emerging Challenges and Lessons for Providers 25 VI. What's Next? 27 Recommendations for supporting crisis environments through financial inclusion  27 Recommendations for policy makers and governments to support host country capacity 28 Recommendations for donors regarding global programming principles 28 Future research and learning agenda 29 VII. Conclusion 31 ANNEX 1 Terminology 32 ANNEX 2 Bibliography 34 i Figures and Boxes FIGURE 1. Displacement on the Rise (figures over 1951–2015) 1 FIGURE 2. Duration of Refugee Displacement 5 FIGURE 3. Account Penetration in Selected Countries with Humanitarian Crisis 7 FIGURE 4. Reasons for Loans Reported by Borrowers 10 FIGURE 5. Formal and Informal Savings (% of adults) 11 FIGURE 6. Chain from Humanitarian Assistance to Financial Inclusion 19 BOX 1. Approach Used for Presenting Financial Inclusion Data 6 BOX 2. IDPs versus Refugees 9 Acronyms ATM Automated Teller Machine CDD Customer Due Diligence FSP Financial Services Provider IDMC Internal Displacement Monitoring Centre IDP Internally Displaced Persons ILO International Labour Organization IRC International Rescue Committee OCHA United Nations Office for the Coordination of Humanitarian Affairs ODI Overseas Development Institute UNHCR United Nations High Commissioner for Refugees WFP World Food Programme ii FOREWORD T oday, a record 65 million people have been forc- ibly displaced by war, conflict, or natural disas- ter, and more than 90 percent of them are hosted by as they try to mitigate shocks, build up assets, and promote local economic development. Changes in the methods of distributing emergency relief are developing countries (World Bank 2016b). Jordan, also opening up pathways to financial inclusion. Turkey, and Lebanon are struggling to cope with an Aid agencies are moving from emergency cash influx of refugees from the Syrian crisis, and Kenya, transfers to digital payments via electronic cards, Tanzania, and Uganda have been hosting refugees presenting new opportunities to link displaced peo- fleeing violence and disaster in neighboring coun- ple to a broader array of financial services. tries for decades. This timely paper—a collaboration between the For the World Bank Group, helping developing World Bank’s Middle East Finance and Markets countries address the urgent challenge of aiding team and the Consultative Group to Assist the displaced people is a key priority. Not only do refu- Poor—provides an important framework for under- gees need help, but their host communities face standing the role of financial services during peri- enormous pressures on their infrastructure, public ods of humanitarian crisis. It offers specific services, and markets—pressures that have the guidance to development partners, governments, potential to undermine their political stability. and financial market actors by outlining operational The increasing scale, frequency, and complexity lessons for financial-sector interventions. By doing of forced displacement, both within countries and so, the authors have made a significant contribution externally, have spurred development institutions that will help advance the global policy discussion to rethink their approaches to humanitarian crises. and encourage further research into the role of In particular, there is no longer a dichotomy financial services in building sustainable liveli- between humanitarian assistance and development hoods for people in crisis. interventions as two distinct, sequential responses. The proposals outlined in this paper—which was As the approach shifts, we need to recognize that funded by the State and Peace-Building Fund financial inclusion is a particularly powerful tool within the World Bank Group—directly supports that countries and development institutions can our broader objective of promoting diversified, effi- mobilize to help mitigate the devastating impact of cient, and inclusive financial systems at the global humanitarian crises. and country levels. Continued collaboration across More than 75 percent of adults who live in coun- sectors, institutions, and borders is the only way tries that are coping with humanitarian crises that the global development community will be remain outside the formal financial system. Finan- able to address the immense challenge of forced cial inclusion would provide both refugees and resi- displacement in a sustainable manner. The detailed dents with a diversified set of financial products analysis in this paper will provide invaluable guid- (including savings, remittances, credit, and insur- ance to the World Bank Group’s country operations ance) that are critical for vulnerable communities as well as to our development partners. Ceyla Pazarbasioglu Senior Director Finance and Markets Global Practice World Bank Group iii iv Executive Summary H umanitarian crises pose a formidable develop- ment challenge. Whether caused by conflict, natural disaster, climate-related events, or some displaced by conflict or violence peaked at 65.3 mil- lion, more than doubling in only five years (see Fig- ure 1). In addition, since 2007, 25.4 million people combination of the three, crises have been steadily are displaced every year, on average, due to natural increasing in frequency, severity, and complexity. disasters and climate-related events,1 and in coun- While the nature and incidences of these crises vary tries affected by such disasters, an estimated $250– significantly, they affect millions of people, particu- 300 billion is lost due to the disruption of local mar- larly the most vulnerable. Some populations are dis- kets and livelihoods (UNISDR 2015). Crises are also placed from their communities or countries as a re- becoming more protracted: 90 percent of countries sult of crises; others stay where they are, by choice making appeals for humanitarian assistance in 2014 or necessity, and must navigate unpredictable and had been registering annual appeals for three years dangerous environments. Forced displacement is or more; 60 percent of the appeals had lasted over becoming more common and more protracted. In eight years (Bennett et al. 2016). December 2015, the number of individuals forcibly FIGURE 1. Displacement on the Rise (figures over 1951–2015) 70m 60m 50m 40m 30m 20m 10m 0 1951 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 IDPs Stateless Refugees and asylum seekers Others of concern Source: UNHCR 2016. Data do not include those displaced by natural disasters nor do they include Palestinian refugees registered under the United National Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). 1. The majority remains within their country (IDMC 2016). The total number of people displaced by disasters at the end of 2015 is not known. 1 As the average duration of displacement has donors can take to improve the provision of finan- increased since the 1990s, recent high-level dia- cial services to crisis-affected populations. The logue has focused on the need for a new develop- paper also identifies future research and policy ment archetype that integrates humanitarian priorities. programming with a development approach focused on resilience and livelihoods among the displaced and their hosts. At the heart of this approach is a Role of Financial Services in recognition of the importance of tackling the Humanitarian Crises medium-term needs created by forced displacement in a manner that complements short-term crisis For populations affected by crisis, the ability to response programming. This is particularly impor- cope with a shock is particularly vital, given that tant given the need for sustainable development the destabilizing impact of shocks is often magni- interventions amid limited funding resources, and fied by fragile and unstable environments. Yet, the frequency and scale of crises around the globe. despite the use and usefulness of financial services Financial inclusion—access to and use of quality in crises situations, financial exclusion is particu- financial services to all income segments of soci- larly acute among crisis-affected countries. Over 75 ety—is one potentially foundational opportunity to percent of adults living in countries with humani- bridge the humanitarian-development divide. tarian crises remain outside of the formal financial Financial inclusion allows low-income households system and struggle to respond to shocks and emer- to build assets; mitigate shocks related to emergen- gencies, build up productive assets, and invest in cies, illness, or injury; and make productive invest- health, education, and business. Demand for finan- ments. It also stimulates local economic activity by cial services in crisis contexts, however, is high. financing microbusinesses and is positively corre- Forty-five percent of adults in countries with lated with economic growth.2 Increased use of humanitarian crises saved money in the past year; emergency cash transfers to address immediate vul- only 7.6 percent report having saved at a formal nerability of crisis-affected people may offer an financial institution. Among a host of interrelated opportunity to enable financial inclusion through factors, financial exclusion can be compounded by new digital deployment mechanisms. Card- and sharp contractions in the real economy, operational mobile-based emergency cash transfer programs disruptions of key financial services providers offer the opportunity to link beneficiaries to trans- (FSPs), destroyed physical and financial infrastruc- action accounts for the first time and, from there, to ture, the lack of assets to secure loans, and legal bar- a broader set of financial services (payments, sav- riers, including the inability to adhere to customer ings, insurance, credit). Financial inclusion can act due diligence (CDD) policies. as a bridge between short-term interventions focused on protection and the provision of basic Emerging evidence shows that financial services services, and longer-term interventions focused have a positive role to play in crises situations.3 on sustaining livelihoods and creating economic Existing evidence suggests that access to financial opportunities. services can strengthen the resilience of individuals In this context, this paper seeks to enhance the and households in the face of negative shocks and knowledge of policy makers and donors on the significantly contribute to supporting livelihoods role of financial services mitigating humanitarian and stimulating economic activity after a crisis or crises by synthesizing existing empirical evidence disaster. Remittances help maintain consumption as well as operational lessons from programmatic during difficult periods and contribute positively to evaluations. Where evidence is strong enough, the local economic activity. Savings, whether formal or paper recommends actions that policy makers and informal, can provide a form of self-insurance and 2. For a comprehensive analysis of the evidence on financial inclusion, see Cull, Ehrbeck, and Holle (2014). 3. The authors reviewed over 100 publications on financial services and crises. Of those, fewer than 20 were rigorous evaluations. 2 thus help people to weather economic shocks with- Barriers to Delivering Financial Services in out resorting to negative coping mechanisms such Humanitarian Crises as assets depletion and child labor. While credit is often used as another coping mechanism for emer- Barriers that impede the delivery of financial ser- gency expenses and to manage basic consumption vices include the lack of effective policies and crisis needs, there is a risk that this can lead to a debt bur- preparedness, particularly the lack of system pre- den rather than improved well-being if it is not paredness to scale up delivery options. This can invested in productive ways. Insurance was found include the lack of a simplified CDD regime and to have positive effects on consumption, asset pro- clear agent regulations to facilitate digital transfers. tection, and the recovery of small businesses. Imple- Crises can cause damage to physical infrastruc- mentation of insurance schemes targeting the poor, ture (roads, telecommunications networks, power however, has been challenging in crisis-prone envi- grids, bank branches, automated teller machines ronments, in part because of weak institutional and [ATMs], and agents) that prevent the immediate legal capacity, transactions costs, and limited use of the financial system in recovery. Conversely, demand due to low trust and low financial literacy. robust and resilient payments infrastructures can A household strategy that uses multiple financial help to address the challenges crises pose. Aid agen- tools rather than just one or two is more likely to be cies and diaspora communities often lack a good successful in mitigating risk, because people face way to get money to affected populations, even for multiple risks at once and may use different tools to those already included financially, and especially if protect themselves against different risks (World they have crossed international borders. Financial Bank 2013). Livelihood programs that combine infrastructure such as automated clearing houses, financial and nonfinancial supports (training, asset large-value interbank settlement systems, credit transfers, and cash transfers) have proven effective bureaus, and collateral registries are often underde- in stimulating consumption and resilience (food veloped in countries affected by crisis. security, mental health, size of household assets). Research has shown that cash transfers have Recommendations important multiplier effects on economic activity and that digital delivery can improve efficiencies, Leveraging financial services as a tool to mitigate decrease leakage, and provide additional security humanitarian crises will require the sustained and convenience. Nonetheless, to date, there are commitment of FSPs themselves. Developing few operational examples where delivering aid contingency plans, building reserve funds, diversi- through digital transfers has actually led to the fying client bases, and investing in staff training are use of a suite of financial services. Currently, only 6 important for maintaining business continuity dur- percent of all humanitarian assistance is channeled ing humanitarian crises. Donors can play an impor- through cash, and while the infrastructure and plat- tant role in supporting market players to prepare form for financial service linkages may exist where for and manage crisis situations. Support can crises occur, people often cash out for immediate include injecting liquidity into local financial mar- consumption. Outcomes depend on the surround- kets while also supporting connectivity, settlement, ing payments infrastructure, regulatory framework and the management of agent networks. Investing (enabling linkages to financial services), and socio- in consumer experience and awareness can help to cultural factors that may result in the preference of promote the uptake and use of financial services by cash. Furthermore, donors may have incentives to affected communities. To promote long-term mar- prioritize getting transfer payments operational ket development during periods of crisis, private- rather than investing in a delivery mechanism linked sector actors should be incentivized to participate to longer-term access to financial services. in financial markets through targeted subsidies and 3 liquidity support, and by mainstreaming tools for Donors need to play a role in building deliberate adaptation, for example, through risk management linkages between humanitarian and develop- and adequate liquidity and provisioning structures. ment efforts through financial services provi- sion. This includes explicitly embedding financial Looking ahead, investing in host country systems inclusion objectives into humanitarian program- and capacity to manage crisis by leveraging finan- ming and aligning the operational incentives of aid cial services should be prioritized. Interventions agencies with the integration of financial sector must support host country priorities. Crisis-adapt- actors into emergency programming. Donors can able regulations should be developed and may also play a leading role in structuring innovative include reviewing CDD requirements that may act financing mechanisms, including concessional as barriers to financial access, notably for forcibly financing for middle-income countries that are displaced populations. Regulatory reforms that hosting large percentages of displaced populations enable mobile money should be expedited. This and the use of blended debt-grants financing and includes agent regulations, tiered or simplified CDD, guarantee mechanisms. and e-money regulations. While investments in pay- ments infrastructure should be a priority well before Further evidence is needed to better understand crisis ensues, crises also present an opportunity to the demand for and use of financial services by “build it back better” by investing in infrastructure different segments of populations affected by cri- or expanding the payments infrastructure into areas ses. Improved evidence around specific products or populations previously excluded. This includes that have high potential in crisis environments is building out agent networks for cash-out points and also needed. This includes further evaluation of investing in adequate mobile and broadband con- the impact of digital payments transfers on finan- nectivity. Payments system interoperability is also cial inclusion objectives. critical and can be invested in before a crisis. 4 I SECTION Why Explore the Role of Financial Services in Crisis Environments? I n crisis contexts, financial services have long been eficiary and important multiplier effects on an used to help vulnerable and excluded people cope economy. Evidence suggests that cash transfers with shocks, minimize risk exposure, and stimu- result in increased food consumption and other late economic activity. For example, beginning in household expenses, improved psychological well- the Balkans in the 1990s, and for nearly two decades, being (reduction in stress) (Haushofer and Shapiro UNHCR provided microfinance programming to 2013), and a reduction in monetary poverty and promote livelihoods and to provide emergency child labor (Bastagli et al. 2016). The United Nations relief services. Recently, policy makers are placing High Level Panel on Humanitarian Financing has greater emphasis on the role of financial services in called for not only scaling up cash transfers in managing crisis and recovering from it. This is in humanitarian programming but also for defaulting large part due to the following factors. Displacement is increasingly for longer time- frames, thus warranting longer-term solutions. FIGURE 2. Duration of Refugee Displacement UNHCR estimates that 40 percent of the refugees 10 under its mandate (6.7 million people) are in a pro- 8.9 tracted situation (UNHCR 2015),4 and a recent pol- 9 icy paper found that refugees have been in exile for 8 10 to 15 years on average (see Figure 2).5 This aver- 7 age has been on the rise over the past two decades Refugees (millions) (Devictor and Do 2016). Simultaneously, the num- 6 ber of people affected by natural disasters rose 5.2 5 almost 50 percent to 141 million people in 2014, a trend best explained by a rise in occurrences of 4 droughts. Nearly 20 million of these affected people 3 were displaced, and the majority of the displace- 2.2 2 2.2 ment was caused by weather-related events (OCHA 2 2015). A majority of disaster-displaced people stay 1 within their countries, but some seek assistance 0.2 and safety by crossing borders.6 0 1–4 5–9 10–34 35–37 38–55 Palestinians years years years years years (>60 years) The increasing shift to cash transfers in humani- Length of displacement tarian contexts presents a compelling opportu- nity. The humanitarian sector is increasingly Source: Devictor and Do (2016), using UNHCR 2015 figures; CGAP. Note: Original dataset shifting from in-kind transfers to cash-based pro- excludes Palestinians whose displacement situation has lasted over 60 years. This figure is not directly comparable to the other data points, which show average lengths of displacement of gramming, which is more efficient and effective, on individuals registered as refugees as of December 2015 rather than the length of displacement (i.e., top of providing freedom of choice for the end ben- Palestinian refugees are not all >60 years old, but the situation of this group has lasted >60 years. “Protracted” is defined as a situation in which 25,000 or more refugees from the same nationality have been in exile for five or 4.  more years in a given asylum country. Note that Palestinian refugees do not fall under UNHCR’s mandate and are therefore not included in this data set. Afghan refugees represent the largest protracted refugee group per UNHCR’s definition. 5. Palestinians excluded. Median is four years. 6. For more information on disaster-induced cross-border displacement, see The Nansen Initiative (2015). 5 to cash transfers in humanitarian responses. The found in humanitarian responses, notably financial World Food Programme (WFP), among other institutions, card acquirers, mobile network opera- humanitarian actors, has made a policy shift to tors, banking agents, and financial sector regula- increasingly move away from direct food assis- tors. These technologies offer important new tance to the use of cash. While cash currently rep- opportunities for responding reliably and at scale resents a very small portion of the global during a crisis, and for reaching remote areas that humanitarian response, the number of people are not accessible using traditional manual distri- receiving cash assistance from WFP alone has tri- bution mechanisms. pled in the past six years to just under 10 million. In 2015, WFP transferred $680 million in cash to these Countries affected by crisis tend to have high recipients (WFP 2016). rates of financial exclusion, yet high demand for At a global level, humanitarian agencies are financial services. Over 75 percent of adults living increasingly relying on digital deployment of emer- in countries with humanitarian crises remain out- gency cash transfers using mobile distribution side of the formal financial system (see Box 1). mechanisms (cell phones, card-reading point-of- These individuals do not have the option to choose sale [POS] devices, text message platforms, and from an array of formal and informal services that cloud-based data management platforms). Simi- allow them to respond to financial shocks and larly, many programs are using bank branches and emergencies, build up productive assets, and agent banking to process cash-out for card-based invest in health, education, or business within programs. New mobile technologies and branch- their households. Analysis of the most recent less banking platforms that manage cash transfer Global Financial Inclusion Database (Findex)7 programs rely on existing financial infrastructure shows that just under 24 percent of adults in coun- and leverage recent technological advancements tries with humanitarian crises have an account that allow digital financial services to develop in with a financial institution or mobile money pro- many lower-income countries. New actors can be vider. Forty-five percent of adults in countries BOX 1 Approach Used for Presenting Financial Inclusion Data This paper presents financial inclusion data for coun- ment organizations (NGOs), international organiza- tries with humanitarian crises. These countries were tions, and media. The categories are based on two selected in line with the classification presented in IRC indicators on the extent of the current crisis (the per- (2016). This classification is based on the Assessment centage of the population in need of assistance due to Capacities Project (ACAPS), which was created in recent or protracted disasters and the level of access to 2009 to support humanitarian needs assessments. the affected population), and three indicators that ACAPS (2016) prioritizes countries according to three together inform on a country’s underlying vulnerabil- categories of crisis: (1) severe humanitarian crisis, (2) ity to crisis (the under-five mortality rate, the Human humanitarian crisis, and (3) situation of concern. The Development Index, and the number of protracted analysis in this paper includes country categories 1 and internally displaced people [IDPs] and refugees). 2. ACAPS data are frequently updated, using secondary data from a range of sources, including nongovern- Note: For more information, see ACAPS (2016). Some countries with humanitarian crisis, such as Eritrea, Libya, Gambia, and North Korea, are not covered by Findex. Hence, 7.  these countries are excluded from all financial inclusion data analyses in this paper. Further explanations are provided where applicable. 6 with humanitarian crises saved any money in the Crises disproportionately affect developing coun- past year, while only 7.6 percent report having tries and by extension the vulnerable and financially saved at a formal financial institution in the past excluded. At the end of 2015, developing countries year (see Figure 3). Ninety percent of refugees live hosted 99 percent of all IDPs and 89 percent of all in low- and middle-income countries, a majority refugees (including Palestinian refugees). In compar- of which have low levels of financial inclusion ison, the six richest nations are estimated to host less (World Bank 2016b). Women living in countries than 9 percent of all refugees (Oxfam 2016). From with humanitarian crises are 30 percent less likely 2008 to 2014, the majority of disaster-related than men to have an individual account (23 per- displacement occurred in lower middle-income cent versus 16 percent), with the largest gender countries, with China, India, and the Philippines ac- gaps found in Lebanon (62 percent of men versus counting for 60 percent of the global disaster-related 33 percent of women) and Afghanistan (16 percent displaced population (OCHA 2015). Reflecting a versus 4 percent). This gap is significantly larger global trend, these countries are also experiencing than in other low- and middle-income countries, rapid urbanization, which increases the poor’s vul- where women are on average 18 percent less likely nerability to natural disasters because of weak infra- than men to have an account. structure and poorly constructed buildings. FIGURE 3. Account Penetration in Selected Countries with Humanitarian Crisis 60% 54% 50% 39% 40% 30% 23% 20% 17% 15% 10% 12% 11% 10% 6% 0% an n . q ia n . co le cr th ep ep oo da Ira al e s in idd ist n wi isi .R ,R m m Su er an So ria es m em en m gh ita ri Ca & m t D an n Af Ye w m ou , go Lo hu C n Co Source: UNHCR 2016. Findex 2014. Figure shows data for seven countries in “severe humanitarian crisis” as defined by IRC based on ACAPS. “Countries with humanitarian crises” is computed for 21 out of 31 countries of the IRC/ACAPs framework with either severe humanitarian crisis or humanitarian crisis. It does not include countries for which Findex data on account penetration were not available, i.e., Central African Republic, Eritrea, Libya, and Syria (severe humanitarian crisis), and Djibouti, Gambia, Lesotho, North Korea, and Swaziland (humanitarian crisis). Data for Sudan include South Sudan. 7 Photo by Sujan Sarkar 8 II SECTION Insight into the Financial Lives of Crisis-Affected Populations R ecent demand-side research underscores the Demand for and use of financial products importance of financial management tools by crisis-affected people used by vulnerable people to meet their finan- cial needs and manage economic uncertainty,8 par- The volatile and unpredictable external environ- ticularly given that they operate within informal ment poor people face heightens the importance of economic structures, and thus act as consuming accessing and using financial services to manage households and self-employed firms simultane- vulnerability and promote basic livelihoods. Data ously. Financial diary research found that, regard- suggest the need for financial intermediation via less of how poor the household, no household in a credit products is elevated in crisis environments. 250 sample used fewer than four different types of Adults in these economies also appear to be in instruments,9 and every household held both sav- greater need of credit than those in low- and mid- ings and debt of some sort (Collins et al. 2009). dle-income countries. While 51 percent of adults in Faced with irregular incomes and uncertain pro- countries with humanitarian crises report some duction and investment opportunities, poor people form of borrowing in the past year, only 43 percent generally require financial management tools that in low- and middle-income countries do so (see allow them to manage short-term cash flow (smooth consumption), address emergencies and manage risk, and build up household assets to finance life- BOX 2 cycle events and productive activities.10 These IDPs versus Refugees financial tools are often informal (family and friends, rotating savings schemes), because the eco- nomic and opportunity costs of interacting with While both IDPs and refugees are displaced populations, formal financial institutions can be high. crossing a border differentiates a refugee from an IDP. The financial needs of those affected by conflict Crossing borders represents a significant set of obstacles, and disasters are no different, including IDPs and experiences, and rights for the individuals involved. Glob- refugees (see Box 2). However, the barriers to finan- ally, there are many more IDPs than refugees (41 million cial access in crisis-affected countries are far versus 21 million). Syria has at least 6.6 million IDPs, fol- greater. This is particularly the case in conflict- lowed by Colombia with 5.7 million. Other countries such affected countries where infrastructure is often as Nigeria, DRC, Iraq, and Sudan have substantial numbers destroyed or decayed, and for refugees who face of IDPs—over 2 million each (IDMC 2016). Nearly half of constraints with regard to identity documentation, refugees come from either Syria or Palestine. This figure assets that can be used to secure loans, and percep- goes up to 60 percent when including Afghanistan, and to tions that they are a flight risk. 75 percent when including four other sub-Saharan coun- tries (Somalia, South Sudan, Sudan, and DRC). See Annex 1 for more terminology. 8. Including Findex, Finscope, financial diaries, and financial landscape studies. The financial diary methodology tracks households over extended periods of time to document their financial management 9.  tools. Researchers conduct house visits with families every two weeks gathering information on all financial activity in the household. Collins et al. (2009) were among the first to use this methodology and to document the complex financial lives of poor people. Since Portfolios of the Poor was published, the same methodology has been used extensively in multiple locations. For more on empirical evidence surrounding financial needs of the poor, see Chapter 2 “Clients,” in Ledgerwood (2013) for a 10.  more intensive discussion of the aggregate financial needs to the poor. 9 Figure 4). Yet borrowers in countries with humani- than the share in all low- and middle-income coun- tarian crises are nearly half as likely to have bor- tries (54 percent), these savers are significantly less rowed from a formal financial institution. Only 9 likely to save at a formal financial institution—and percent in low- and middle-income countries and 5 more likely to save using a community-based percent in countries with humanitarian crises method (see Figure 5). Low levels of formal savings report borrowing from a formal financial institu- behavior may also be linked to low state capacity tion. Informal financial services tend to be flexible and low trust in institutions, including financial and close to where poor people live; however, these institutions. These data suggest there is demand for services may lack product characteristics and qual- savings vehicles within a crisis context and a need ity-assurance mechanisms required to meet the full to make linkages between informal savings behav- financial needs of those who are excluded. ior and the formal financial system. A 2016 survey of more than 4,500 Syrian refugee households in Lebanon revealed that 90 percent of households are indebted, with an average amount Profiles of crisis-affected of $857 per household (UNHCR, UNICEF, and populations WFP 2016). A study in Haiti conducted by ACTED found that the percentage of households in debt The profiles of crisis-affected populations can vary rose 13 percent after the 2010 earthquake. The widely. These populations can be rich or poor, greatest contributing factors to household debt lev- highly educated or illiterate, skilled or unskilled. els were business costs and school fees (Jusselme Each crisis scenario requires stakeholders to under- and Brenna 2011). stand the specific profiles of the people with whom While the share of adults in countries with they are engaging. For example, while many Syrians severe humanitarian crisis who report having saved displaced by the ongoing civil war are highly edu- in the past year (43 percent) is only slightly smaller cated and skilled, other refugees, like Somalis or FIGURE 4. Reasons for Loans Reported by Borrowers 20 15 10 5 0 Health or Funerals and Home School fees Home emergencies weddings construction purchase Countries with humanitarian crisis Low & middle income Source: Findex. Data are from 2011 because the question was asked differently in 2014. “Countries with humanitarian crisis” includes the IRC/ACAPS categories “humanitarian crisis” and “severe humanitarian crisis.” The data, however, exclude Eritrea, Libya, and Somalia (severe humanitarian crisis) and Ethiopia, Gambia, and North Korea (humanitarian crisis) because Findex data on borrowing reasons were not available for these countries. Data for Sudan include South Sudan. 10 Afghans, generally have much lower levels of ally, refugees are increasingly living in cities and income and education. Displacement is a common outside of refugee camps. For example, in Jordan, phenomenon linked to crises, particularly conflict. more than 80 percent of refugees are living outside Conflict itself can be induced and magnified by cli- the camps. For those who do live in camps, these mate change; populations from low-income and settlements are often located in remote rural areas lower middle-income countries are more likely to and tend to become economic hubs in themselves. be displaced because of climate change. However, For example, Zaatari camp is now the fourth larg- not all crises result in long-term displacement. est city in Jordan. The largest camp in the world, Populations affected by natural disasters may be Kakuma, is located in northern Kenya and hosts temporarily displaced, and can often return to their nearly 200,000 people. Because those who are communities relatively quickly. Natural disasters forcibly displaced are often unable to take posses- are more likely to impact poor people who often sions with them, they are less likely to have assets live in more precarious housing where infrastruc- that can be used to secure loans, and they lack ture and access to services are already limited. Low- immovable collateral required by many FSPs. income populations may settle in areas prone to While some may be able to move with savings, the natural disasters because these areas provide eco- journey itself often consumes a significant amount nomic opportunity, affordable land, or access to of whatever savings they were able to take with amenities (Hallegate 2017). As such, the profiles of them. As noted earlier, this results in a greater pro- populations that are impacted by natural disasters pensity to borrow to manage basic needs. are likely to mirror the profiles of poor people in There is a clear need to better understand the any particular country. various segments that make up crisis-affected peo- In contrast, refugees tend to be displaced for ple, their individual needs, and their constraints. longer periods and see their social networks dra- In the absence of such global data, the following matically impacted, even when they return. Glob- provides a basic segmentation of key vulnerable FIGURE 5. Formal and Informal Savings (% of adults) 70 60 50 40 30 20 10 0 Afghanistan Cameroon Congo, Iraq Somalia Sudan Yemen, Countries Low & Dem. Rep. Rep. with severe middle humanitarian income crisis Saved at financial Saved using a savings club Saved using institution or person outside the family other method Source: Authors’ analysis of Findex 2014 data; excludes Central African Republic, Syria, Eritrea, and Libya, for which Findex data are not available. 11 groups affected by crisis, with particular reference time. Security is critical given that women have a to refugees. relatively high risk of being abused. Streamlined product features may be important given that Youth. Children and youth younger than 18 repre- women are more likely to be illiterate and less likely sent over 50 percent of refugees. Displacement for to have formal identification to adhere to CDD this group has important life implications because requirements of formal financial institutions. this formative period can determine lifetime out- comes. Research indicates the importance of sav- ings over credit for youth globally. Access to savings Legal barriers complicating access to and forming savings habits are particularly impor- financial services in crisis contexts tant because they could lead to opportunities for future education, health care, and employment Access to and use of financial services is compli- both during the displacement period and after cated by legal barriers, some of which are specific to return or resettlement (Kilara et al. 2014). Yet access crisis contexts. Others are not, like the absence of to financial services tends to be heavily restricted valid identification documentation that prevents for minors, particularly because countries have age around 375 million adults from accessing accounts limits on who is authorized to open an account, and (World Bank 2016c). IDPs, whether displaced by many youth do not receive formal identity docu- natural disasters or conflict, are citizens in their ments until they reach the legal age of the majority. own country, and they retain all rights accorded to other citizens. Theoretically, they also retain their Unaccompanied minors. There are large and grow- national identity and any financial privileges that ing numbers of unaccompanied minors among the this entails, such as opening a bank account, regis- world’s displaced people. In its latest report, tering for a mobile wallet, or receiving a govern- UNHCR (2016) estimates that there are 98,500 ment transfer. Exercising these rights, however, unaccompanied minors. This group may face addi- may not always be feasible when displacement is tional obstacles to accessing and using financial ser- linked to civil unrest and/or abuses of existing vices. As indicated earlier, research has shown that political structures, but IDPs often have access to savings is particularly important for this segment as family or friends who speak the same language, can a lever for further economic opportunity. For exam- offer refuge or assistance, and can support access to ple, many countries have age limits on who is autho- family assets and job opportunities. rized to open an account, and without a parent or On the other hand, those who have fled their guardian to rely on, this subsegment of youth would countries and crossed an international border as a require specific exemptions or solutions. result of crises can face bigger complications in accessing healthcare, housing, education, and legal Women. Women now account for 49 percent of services, let alone financial services. While UNHCR refugees. These women often have the double bur- formally registers refugees and issues identification den of caring for children and the elderly while also documents to them, formal financial institutions contributing to their family’s income through infor- often do not recognize these as valid identification mal or formal employment. The top 15 countries documents. hosting refugees together have 170 women-only Prevailing CDD requirements usually require legal restrictions of employment (World Bank national identification documents or passports, 2016b). At the same time, the cultural norms around which may have been destroyed or lost in the event mobility, freedom to engage with public institu- of a sudden disaster or displacement due to conflict, tions, and vulnerability to violence present a distinct making it difficult for affected communities to set of challenges for serving this segment. Of par- access financial and other services. Policy makers ticular significance will be the ways in which finan- could consider measures to diversify what financial cial services are delivered. Convenience is essential sector institutions can accept for identification. For given women’s restricted mobility and scarcity of example, the Central Bank of Jordan specifically 12 authorizes UNHCR-issued identification docu- Some FSPs, however, may require additional docu- ments as acceptable identification for meeting CDD ments such as a proof of address (e.g., utility bill) to requirements. In Finland, Moni, a payments com- process a financial transaction, in their efforts to pany, provides anonymous prepaid cards to asylum detect and report suspicious activity. Regulation seekers by relying on the combination of a case allowing providers to adopt a risk-based approach number from the Ministry of International Affairs may help balance financial sector access and integ- and police records, thereby protecting the asylum rity in crisis contexts. seekers’ privacy while fulfilling CDD requirements. 13 Photo by Yavuz Sariyildiz 14 III SECTION Evidence on How Financial Services Support Crisis-Affected People and Communities R esearch indicates that access to and use of financial tools rather than just one or two is more financial services can improve the well-being likely to be successful in mitigating risk, since peo- of people living in poverty, thereby bringing ple face multiple risks at once and may use different us closer to achieving the United Nation’s Sustain- tools to protect themselves against different risks able Development Goals (SDGs) (Klapper et al. (World Bank 2013). 2016). Although the mechanisms used to improve social outcomes vary and depend on context and circumstances, evidence increasingly shows that Remittances help people cope with strengthening the ability to withstand negative shocks and support economic activity shocks is key. For populations affected by crises, the ability to cope with a shock is especially vital, By increasing the safety and ease of sending money, because the destabilizing impact of shocks is often payments services allow people to leverage their magnified by a fragile and unstable environment. networks for support during challenging times. In While analysis of disasters is mostly captured in Kenya, for example, mobile money (M-Pesa) aggregate levels (e.g., the total dollar figure of esti- increased a household’s resilience in dealing with mated damage after a cyclone), loss affects poor and negative shocks related to weather or illness (Jack marginalized individuals far more acutely. Poor and Suri 2014). Specifically, while shocks reduced people have fewer assets to support their liveli- consumption by 7 percent for households without hood, consume close to subsistence levels, and access to M-Pesa, the consumption of households often cannot rely on savings to ensure health and with access remained unaffected, due to an increase education outcomes are maintained during periods of inward remittances after the negative shock. of crisis (Hallegate 2017). Similarly, in Rwanda, households sent airtime cred- For the purposes of this paper, the authors its to people affected by natural disasters (Blumen- reviewed more than 100 publications on financial stock et al. 2016). Between December 2007 and services and crises.11 Evidence suggests that access February 2008—a period of post-election violence to financial services can strengthen the resilience of in Kenya—households leveraged the then-nascent individuals and households in the face of negative M-Pesa to safely help their relatives and friends shocks, and that they can play an important role in sustain themselves during this period of dramati- supporting livelihoods and stimulating economic cally limited mobility and access to money (The activity after a crisis. (In this paper, resilience refers Economist 2015). to the ability of an individual to minimize overall Beyond their significant microeconomic bene- welfare loss during an economic shock.)12 Negative fits, remittances can have positive effects on local or shocks can vary from idiosyncratic shocks at the community-level economic activity. For example, in individual level, such as a health problem, to shocks the Kakuma refugee camp in northwest Kenya, the at the community level, such as flooding or weather- impact of remittances was found to extend well related events, or the national level, such as war or beyond the camp. The Kenyan government cut off civil unrest. A household strategy that uses multiple the remittance flow between Somalia and Kenya for 11. Of those, fewer than 20 were rigorous evaluations, on which this section focuses.  ocioeconomic resilience can be measured by an economy’s ability to minimize the impact of asset losses on well-being. 12. S For a more detailed discussion, see Hallegate (2017, fn 31). 15 four months following the April 2015 Garissa Uni- food security, and mental health in treatment versity College attack. During those four months, groups at the end of the program. One year after the consumption fell in the area—not just among those program ended, the primary impacts of the pro- living in the refugee camp, but also among those liv- gram (on consumption, assets, and food security) ing nearby. This effect demonstrates the positive declined only slightly or not at all. In five of the six impact remittances to the camp has on the welfare sites, the estimated benefits outweighed the pro- of the surrounding communities (Sanghi et al. 2016). gram costs (Banerjee et al. 2015). A separate assessment found that in Bangladesh, seven years after the program launched, earnings Access to savings increases resilience had gone up 37 percent, with significant increases in consumption and savings (Balboni et al. 2015). By providing a form of self-insurance, savings Until recently, all of the existing evidence on the accounts can also provide a buffer against the Graduation approach had been derived from expe- impact of negative shocks and may strengthen a riences in stable environments, and it remained to household’s livelihood. In the Philippines, house- be seen whether the positive outcomes could be holds that used savings accounts had stronger replicated in crises-affected situations. In 2013, recovery from the effects of Typhoon Yolanda UNHCR started piloting the approach with refu- (Hudner and Kurtz 2015). Interestingly, formal and gees in five countries (Egypt, Costa Rica, Ecuador, informal financial services seem to contribute Burkina Faso, and Zambia). These pilot projects somewhat equally to building a household’s resil- should help to determine whether the Graduation ience. In northeastern Burkina Faso, an area with approach’s successes are replicable in different low rainfall and therefore a high propensity for contexts.13 droughts, financial diaries revealed that households Community-based savings groups (SGs), which primarily rely on savings to handle shocks (Gash combine access to savings and credit, have been and Gray 2016). Otherwise they reduce consump- used extensively in crisis contexts. Program designs tion or sell livestock. Therefore, providing ways of vary and include village savings and loan associa- storing value and removing barriers to formal sav- tions (VSLAs), self-help groups, and rotating credit ings accounts could significantly improve house- and savings associations (ROSCAs). holds’ abilities to withstand shocks without Evidence shows that SGs consistently increase resorting to negative coping mechanisms (e.g., the amount of savings and the use of credit among assets depletion, child labor). participants. A study of an SG in Burundi, which Access to savings accounts is also one of the targeted vulnerable populations displaced by the components of the Graduation approach—a civil war, also demonstrated significant poverty sequenced intervention targeting the ultra-poor reduction. Over the course of the evaluation, the and designed to build self-reliance. This approach poverty rate among households in the control group encompasses a combination of ongoing cash trans- increased by 10 percent, while the poverty rate of fers, coaching, livelihoods training, and savings treatment group households fell by 4 percent, sug- accounts. Six randomized assessments (in Ethiopia, gesting that access to SGs allowed households to Ghana, Honduras, India, Pakistan, and Peru) were mitigate—and even prosper despite—negative conducted by Innovations for Poverty Action and shocks. Other studies indicate that households the Abdul Latif Jameel Poverty Action Lab between with access to SGs have greater food security, 2007 and 2014. The evaluations used data from potentially because of a higher likelihood of bor- more than 20,000 people in 10,000 households and rowing from SGs in the aftermath of shocks (Gash found higher levels of income, consumption, assets, and Odell 2013). A mid-term evaluation carried out in Egypt found the pilot program for urban refugees demonstrated positive short-term 13.  impacts in employment generation, business development, and income levels, but that the program lacked the activities needed to sustain such impact for the medium to long term. 16 Insurance and social protection can work positive” on disaster microinsurance reducing together to reduce vulnerability disaster losses (Mechler et al. 2006). A study is underway in India that will evaluate disaster Insurance can provide critical financial support dur- microinsurance for urban small businesses (Patel ing periods of crisis, and is particularly relevant for and Bhatt 2016). Urban small businesses have not regions or countries that are prone to weather-based commonly been targeted for microinsurance, and natural disasters. Ideally, households would already therefore this evaluation could shed light on an have access to insurance programs to protect them important segment. from risks associated with such events. Index-based drought insurance products have positive effects on consumption and asset protection.14 More research is needed on the role of In Kenya, insured households were found to be credit for crisis-affected populations 36 percent less likely to anticipate drawing down assets, and 25 percent less likely to anticipate There have been no rigorous evaluations of micro- reducing meals upon receipt of a payout compared credit in crisis environments, and existing evalua- to uninsured households (Janzen and Carter 2013). tions of microcredit in stable environments In drought-prone areas of Senegal and Burkina primarily focus on traditional microfinance prod- Faso, farmers who purchased insurance invested ucts that are intended to support microenterprises. more in inputs and had greater yields (Delavallade Given the increasing recognition that borrowers et al. 2015). Insurance is also critical for business use funds for consumption smoothing purposes as recovery. Researchers found that two years after well as—or in lieu of—business investments, addi- the 2011 earthquake in Christchurch, New Zea- tional research on the impact of other forms of land, firms that had purchased insurance were microcredit would be of value (e.g., emergency con- more likely to have greater productivity and per- sumer credit). formance compared to uninsured businesses Research indicates that refugees already face (Poontirakul et al. 2016). substantial debt burdens, and more credit will not Nonetheless, designing and marketing disaster necessarily lead to improved well-being if the funds insurance for low-income households presents a are not invested productively, which requires access unique set of challenges, and there is mixed evi- to markets and the right to work. Taking on addi- dence on actual implementation. Challenges related tional debt may be necessary to manage emergen- to developing insurance markets include weak cies, but other financial services are likely to have institutional and legal capacity and high transaction fewer negative effects. costs, especially for poor people. Research indicates that low levels of financial literacy and trust in insurance make it difficult to Digital cash transfers can offer an entry stimulate demand (Clarke and Grenham 2013). point to financial inclusion, although Even where access to insurance is prevalent, there more testing, operational roll-out, and are challenges related to claims management, pay- evaluation is needed out processes, and the design of products that reach the poor and do not exclude the extreme Cash transfers are an important element of a coun- poor (Hochrainer-Stigler et al. 2012). A review of try’s risk management strategy and play an impor- microinsurance schemes concluded that “experi- tant role in meeting immediate economic needs ence is mixed” on microinsurance reducing long- during a crisis, whether it is done by leveraging term risks of disasters and that “evidence is less existing national programs or by sending humani- Weather-based index insurance is a relatively new approach for insurance that triggers payouts without the need to submit a 14.  claim. Payouts are based on an index comprising objectively assessed weather conditions that often correlate with farmers losing assets. Indices can include rainfall, wind, crop yields, and satellite-determined vegetation levels. 17 tarian actors to affected communities. Researchers humanitarian assistance is channeled through cash have calculated multiplier effects of up to 2.5 for (World Bank 2016a), despite evidence of the effi- vouchers and cash transfers, meaning that for every ciency of using cash and its numerous global advo- $100 in cash assistance, $250 is generated in the cates (see Figure 6). Even when aid is channeled local economy. A Food and Agricultural Organiza- through cash, enabling sustained use of broader tion (FAO) analysis of a social cash transfer pilot in financial services through one-off or time-limited Ethiopia found multiplier effects ranging from 1.26 cash transfer programs has proven to be quite diffi- to 2.52 (Kagin et al. 2014), while an evaluation of cult. Mercy Corps (2014) offered this summary: “. . . WFP’s food voucher program in Lebanon calcu- delivering aid through e-transfers does not auto- lated a multiplier effect of 1.51 in the food products matically lead to the uptake of new financial ser- sector (Bauer et al. 2014). Similarly, IRC released a vices by program participants. Instead, participants study in 2014 estimating the impacts of the UNHCR typically withdraw their full transfer when it winter cash transfer program for Syrian refugees in becomes available and rarely use their new accounts Lebanon and calculated a multiplier effect of 2.13 after programs end. This holds true in both large (Lehmann and Masterson 2014). government social safety net programs and human- The push to transition from physical cash deliv- itarian cash transfer programs. . . . ”15 There are sev- ery to digital transfers is based, in part, on the idea eral reasons for this. Because infrastructure might that digital payments will lead to greater financial be missing or destroyed, including for merchant inclusion. Well-designed transaction and savings acceptance networks, the cost and distance to an accounts built into digital transfers can offer vul- access point, the availability of funds at an ATM, or nerable communities the opportunity to save even social stigma of queuing for assistance, benefi- money and build assets during periods of signifi- ciaries may prefer to cash out. Besides, there are cant economic uncertainty. They may also provide trade-offs between financial inclusion and humani- an entry point to a broader array of financial ser- tarian objectives that factor into programming vices (credit, insurance) by interfacing with FSPs decisions and resource allocation. and the formal financial sector. The link is not guar- Where the objective is to respond rapidly to cri- anteed, however, and outcomes seem to depend on sis, it is likely more important to prioritize getting a variety of factors, including the product’s design transfer systems operational than invest in a delivery and features, the duration of the transfer, the mechanism linked to financial services. Indeed, surrounding payments infrastructure, and the regu- transfer amounts, transfer purpose (immediate con- latory framework that can influence recipient pref- sumption needs versus recovery or livelihoods erences for physical versus digital cash. development), and the intensity of institutional or Specific socio-cultural factors can also influence donor pressure to monitor and trace the delivery use of digital payments, particularly in conflict and and use of aid all impact incentives to deliberately crisis settings. For example, while mobile money open pathways to financial inclusion. users avoided 2008 post-election violence in Kenya Even without clear links to financial inclusion, by relying on digital cash, a recent study in Afghani- digital delivery can still offer benefits. Increased stan found that individuals exposed to or fearful of efficiency and decreased leakage are the most com- violence withdrew their mobile money balance to monly cited reasons to use digital delivery, but evi- increase cash on hand in an emergency (Blumen- dence suggests that digital delivery can also enable stock et al. 2015). consumption smoothing, provide additional secu- The chain that links humanitarian assistance rity and convenience (e.g., faster receipt of funds, and financial inclusion can indeed be complicated eliminating need to queue in long lines in some in practice, first of all, because only 6 percent of all cases), and increase options for where and how GSMA (2014) reported similar findings: in nearly all examples of mobile money cited in its research, displaced populations 15.  immediately withdrew the full amount of their transfer. 18 recipients spend the funds. This is illustrated in an transfers, the mobile platform recipients used their evaluation of a post-drought cash transfer program funds to buy a greater variety of items, ate food from in Niger, where randomly assigned households more diverse sources, sold fewer assets, and grew received cash transfers in cash or through Zap, a more diverse crops. The researchers hypothesize mobile money platform (Aker et al. 2011). Zap sig- that the differences can be attributed to the nificantly reduced costs for the NGO running the increased privacy that the mobile channel afforded program and for recipients accessing the transfer. recipients and women’s greater control over spend- Compared to those who received physical cash ing decisions within the household. FIGURE 6. Chain from Humanitarian Assistance to Financial Inclusion 94% In-kind transfers (incl. on cards Majority or mobile) Humanitarian Physical assistance Cash out cash $28 billion/year Cash transfers Access & use 6% Digital of financial transfers services Minority 19 Photo by Prakash Hatvalne 20 IV SECTION Barriers to the Delivery of Financial Services in Crisis D espite emerging evidence that FSPs support of cash transfers to thousands of beneficiaries. In the use of financial services in crisis envi- practice, a simplified CDD regime is seldom in ronments, operational challenges can deter place, thus limiting the ability of humanitarian orga- development actors from making the intentional nizations to link cash transfers to transactional or linkages or investments necessary to support finan- savings accounts and delaying their ability to cial access and use. Although there are numerous respond quickly with long-term solutions. There case studies and guidelines on how to deliver finan- are several examples of successful application of cial services in contexts of disaster or conflict, simplified CDD requirements for humanitarian pervasive challenges remain at the policy and infra- purposes (e.g., the Philippines and Haiti). Allowing structure level, and operational challenges unique the use of aid agency-issued identification, notably to current humanitarian and financial inclusions for refugees, and classifying the aid agency as a “cus- contexts are emerging. tomer” are two strategies that have been effective (Levin et al. 2015). Lack of, or opaque, agent regula- tion may hinder the financial sector’s ability to Policy environment respond to the increased demand, particularly in remote regions where branches are not viable, or to Policy and regulatory environments that enable sufficiently oversee agent management and con- financial institutions to provide services to poor duct. Regulation may need to be modified to allow people are a priority in any context, but they are for third-party vendors or agents to act as cash-in particularly important in crisis environments given and cash-out points during crises. pressing and urgent humanitarian needs. There is This presents a challenge for governments to often a lack of explicit national policies toward pro- quickly (1) understand the issues and identify the moting resilience in times of crisis, particularly for trade-offs, (2) put in motion the necessary regula- refugees. In certain instances, government policies tory changes that may be needed, such as agent reg- prevent refugees from settling in host countries, ulation or simplified CDD, and (3) where relevant, often by restricting access to services, including the address political concerns related to host commu- formal financial sector. Policy makers may be ill- nity versus refugee-related services. More effort is equipped during times of crisis to make appropriate needed to help countries prepare for and quickly reforms and investments either because of political respond to crisis situations, and much of this work is instability or because traditional policy technical needed well before a crisis ensues. tools (monetary and fiscal policy, payments systems, liquidity, and refinancing facilities) may be ineffec- tive in light of the severity of particular crises. Physical and financial infrastructure One of the biggest challenges most crises-prone countries face when confronted by a large influx of Physical infrastructure, such as roads, telecommu- displaced people is the financial system’s lack of nications networks, power grids, bank branches, preparedness to scale up and to develop rapid deliv- ATMs, and agents, can be severely impacted as a ery channels. In a very short period of time, human- result of conflict or natural disasters. Without this itarian actors may have to manage the distribution basic physical infrastructure, financial institutions 21 are unable to participate as part of the recovery pro- in 2012, Equity Bank had to “increase agent pres- cess. Financial infrastructure, such as payments sys- ence ten-fold” in certain counties (Zimmerman tems, automated clearing houses, large-value and Bohling 2013). To expand cash transfer pro- interbank settlements, credit bureaus, and collateral grams for Syrian refugees in Lebanon and Jordan, registries, are generally underdeveloped in many humanitarian agencies facilitated an expansion of developing countries, not only those affected by cri- POS and iris scan recognition machines, with a ses. Yet a robust and resilient payments infrastruc- focus on rural areas. These investments not only ture can help to address challenges brought on by support the immediate crisis but also benefit the crises. Diaspora communities tend to react fast— expansion of the financial system to previously even before international aid—but they often lack an excluded communities. effective way to get money to the affected popula- tions, including to those who have accounts, and especially to those who have crossed international Donor engagement borders. After the 2010 earthquake in Haiti, getting aid While donors are increasingly prioritizing the pro- through the financial system was nearly impossible vision of financial services in both humanitarian as a result of the destruction. Fonkoze, a microfi- and development contexts, much needs to be done nance institution (MFI), resorted to partnering to achieve complementarity between those two with the U.S. military to deliver money by helicop- types of programming. Donors influence opera- ter so that Haitians abroad could remit funds to tional incentives and capacities to leverage finan- their families, and customers in Haiti could access cial services in crises by offering technical assistance their savings (Luce 2010). Although various institu- and financing to encourage FSPs to operate in these tions and those responsible for financial system volatile and risky environments. They also support infrastructure are increasingly aware of the need to the development or reconstruction of financial prepare for crises, not enough attention has focused infrastructure, including outreach to potentially on ensuring that both physical and financial infra- hard-to-reach areas that might not otherwise structure are crisis-ready. attract FSPs that operate only when there is a good Countries that are affected by crises do not neces- business case to do so. Yet, the priorities of humani- sarily face physical damage, but crises present tarian donors do not always align with the needs opportunities to improve existing physical and associated with creating sustainable and resilient financial infrastructure. Humanitarian organiza- financial sectors. tions such as WFP and UNHCR increasingly rely on Provider and product selection decisions of the host country’s existing national payments sys- implementing agencies are often based on cost effi- tems to distribute cash assistance to refugees. This ciencies or speed and are not necessarily conducive added volume of transactions may strain existing to long-term sustainability. For example, donors systems, including ATMs, branches, and agents, but may use parallel systems to deliver emergency coordination between host countries and humani- transfers rather than partnering with financial- tarian actors can improve the business case for pro- sector actors. In response to the 2010 Haiti earth- viders to serve previously unconnected regions of quake, donors invested heavily in building mobile the country. money agent networks to facilitate disbursement of Rather than invest in one-off or closed-loop sys- a massive influx of aid to the country. Because tems, investments by the humanitarian community donors failed to adequately study the sustainability can be structured to support infrastructure expan- of such a setup for FSPs, the effort ended when sion and agent networks that can be sustained by donor subsidies ended. the private sector well beyond the crisis period. For Some donors are ambivalent about multipur- example, to prepare for its partnership with WFP pose cash transfers and unrestricted recipient cash transfers in Kenya’s arid and semi-arid lands ownership over accounts, because these products 22 tend to give donors less control and visibility and tions can access into the future (Martin and Zim- limit their ability to measure and track results. merman 2016). Donors may be more apt to take on scrutinized, Constraints to accessing cash to finance opera- limited-purpose financial tools that help them tions (liquidity) often prevent FSPs from operating meet their needs, but that do not easily link aid in crises. Donors have addressed these constraints recipients with sustainable, meaningful financial in a variety of ways at national or regional levels. For services solutions. These choices detract from the example, the donor-established Central American business case for FSPs and reduce potential added- Emergency Liquidity Facility (ELF) lends to FSPs value of financial services to recipients. Donors that have liquidity problems during economic crises that prioritize financial inclusion for poverty alle- or natural disasters. The Indonesia Liquidity Facil- viation and economic opportunity often do not ity After Disaster (ILFAD), funded by USAID and sufficiently consider the role and risks of shocks.16 managed by Mercy Corps, serves a similar function, However, efforts are being made to encourage bet- with an exclusive focus on natural disasters. ter informed decisions. Donors have a unique role to play in supporting In 2016, a group of humanitarian payments pro- FSPs and governments to prepare for and cope viders, donors, and financial inclusion experts with crises. Improving the complementarity of developed the Barcelona Principles for Digital humanitarian and aid funding can go a long way in Payments in Humanitarian Response. These prin- creating the necessary market incentives for mar- ciples aim to guide the use of digital payments to ket actors—host countries and FSPs—to make the improve response and enable resilient and inclusive necessary investments in capacity, infrastructure, financial infrastructures that recovering popula- and policy.  here are many global efforts to support and guide the development or deepening of digital payments in noncrisis environ- 16. T ments, including the G20 Principles for Digital Financial Inclusion, the World Bank guidance on Payment Aspects of Financial Inclusion, and the Better Than Cash Alliance’s Responsible Digital Payments Guidelines and 10 Accelerators to Inclusive Digital Payments Ecosystems. Little of this guidance, however, considers issues specifically related to crisis contexts and/or related populations. 23 Photo by Ingrid Bonilla Rodriguez 24 V SECTION Emerging Challenges and Lessons for Providers A crisis affects both people and institutions. • Address liquidity constraints to incentivize Providers working in crisis-prone regions providers. Liquidity is one of the first and most are as likely to experience set-backs as the critical constraints providers face during a crisis. clients they serve. Putting in place mechanisms to Agents that provide cash-out functions for emer- support an institution’s crisis preparedness and gency transfer programs require adequate liquid- response is critical to ensuring that services can ity and supporting connections to efficient resume quickly after crisis ensues and that the payments and settlement systems. Donors play institution will not suffer significant losses. Simi- an important role in supporting the national pay- larly, consumer outreach is required to promote ments channel ecosystem, which encompasses market uptake of products introduced during a setting up digital transfer programs and ensuring period of crisis. distribution, cash, and liquidity management. Despite substantial efforts to instill the impor- Traditional FSPs, including banks and MFIs, tance of preparedness planning and risk manage- may be unable to access market finance (inter- ment of FSPs, there is still much room for bank, from external investors) due to operational improvement. Many providers do not have crisis deterioration, decrease in deposits, and macrofi- response plans nor have they taken precautions to nancial imbalances in debt markets. To help miti- mitigate risks such as diversifying the client base, gate these constraints, donors can provide supporting clients to build their own resilience, or support through lines of credit, financing through negotiating arrangements for short-term liquidity apex institutions, or partial credit guarantees to needs. Emerging lessons in this respect include the local financial institutions that promote the following: expansion of small businesses. In many post-conflict settings, supporting • Invest in preparedness. A large body of litera- apex institutions to inject quick liquidity into the ture points to the importance of preparedness in market while supporting MFIs has been a stan- mitigating risks and better managing crises: dard since the Local Initiatives Department global good practices have been well docu- (LID) was created in Bosnia and Herzegovina in mented.17 For FSPs, guidelines on how to mini- 1996 (Goodwin-Groen 2003). LID was consid- mize risks associated with operating during ered a success; it exited the market after fulfilling disasters and conflict focus on ensuring business its mandate to inject liquidity and build capacity continuity and rapid recovery from shocks, not among market actors. Many apex institutions only for the institution itself, but also for its cli- that have subsequently been established in post- ents, and to the extent possible, for the sector. conflict settings, however, have not been effec- General recommendations include developing tive at meeting stated objectives (Forster and contingency plans, building reserve funds, diver- Duflos 2012). sifying the client base, collaborating and sharing knowledge with other institutions or networks, • Understand client needs and opportunities to and investing in staff training. Preparedness is serve new segments. While FSPs need to work also critical for mobile network operators and with their existing clients who may be affected their agents.18 by crisis, they may also have an opportunity to  or example, see SEEP’s Minimum Economic Recovery Standards and Disaster Risk Reduction program: http://www. 17. F seepnetwork.org/minimum-economic-recovery-standards-resources-174.php and http://www.seepnetwork.org/disaster-risk- reduction-program-pages-20799.php, respectively. 18. S ee GSMA (2015 and 2016). 25 serve new clients. A recent Social Protection (Zimmerman and Bohling 2013). In support of Task Force (SPTF) and UNHCR publication syn- this objective, the program initially tried to use a thesizes many of the lessons that FSPs have mobile money platform linked to M-Pesa to learned from their experiences serving refugees make the transfers but switched to a bank (Hansen 2016). As with any other new client seg- account-linked debit card system when it found ment, FSPs need to invest in up-front market network connectivity was too weak to support a research before launching or expanding their mobile money platform. Even on the debit card services. These steps are even more important system, the program faced challenges, notably for refugees, where lack of information and insti- related to enrolling recipients, ensuring that tutional barriers may be more acute. SPTF agents had sufficient liquidity, and managing emphasizes the importance of scoping and technology failures. developing strategies, building relationships Recent GIZ and CGAP research in Jordan with refugee populations, segmenting clients, identified the need to raise awareness of mobile revisiting any criteria that exclude refugees money as a key success factor for its uptake and (such as identification or residency require- use by both Syrian refugees and low-income Jor- ments), and learning from pilots. Awareness and danians alike. Methods for training and aware- capability is particularly important when rolling ness building vary by context. After Typhoon out digital payments solutions to mitigate crisis, Haiyan struck the Philippines, Mercy Corps especially if mobile money is not well developed launched a mobile money cash transfer program or widely used before a crisis hits. to support recovery and tested two ways of rais- ing client awareness (Causal Design 2015). The • Respond to a crisis—doing nothing can dam- study compared the impact of a one-hour finan- age an FSP’s reputation. Where there are recur- cial literacy training versus the impact of voice ring natural disasters, FSPs that do not respond messages delivered to recipients to encourage immediately to clients, through either direct savings. The study found that the one-off training relief efforts or collaboration with relief agen- had no effect on the likelihood that recipients cies, may lose the confidence of communities would increase their savings behavior, but that they serve. FSPs that are well established and the beneficiaries who received the voice message whose clients are affected can take on relief reminders increased their use of formal and efforts without negative operational impact on informal savings products. their viability. Numerous case studies from Ban- Because crisis contexts are often typified by gladesh, India, Sri Lanka, and Nepal, among low-infrastructure environments with limited many others, have demonstrated how FSPs have formal financial sector development, consumers directly supported aid delivery or partnered typically have limited options. Consumers are with aid organizations to ensure that assistance often mandated into a specific type of account reaches their clients.19 with an FSP that is chosen by a humanitarian • Use consumer experience and awareness to actor. Lack of choice does not always translate help promote uptake and use of formal ser- into acceptance of formal financial services, par- vices. Network outages, liquidity problems, and ticularly if these services are of poor quality or a lack of transparency can undermine effective poorly managed. In fact, consumers will con- adoption and use of financial services (Zimmer- tinue to rely on informal services—whether in man and Baur 2016). A WFP conditional cash the form of VSLAs, ROSCAs, or hawalas (money transfer program targeting food-insecure house- transfer networks)—over poor-quality, inconve- holds in drought-prone areas of eastern and nient, expensive, or otherwise poorly designed coastal Kenya aimed to achieve financial inclu- financial products or services, as consistently sion objectives alongside its food assistance goals shown by Findex data analysis.  ee the seven case studies produced by the Foundation for Development Cooperation (Nagarajan 2006a, 2006b, 2006c, and 19. S 2006d) and the Banking with the Poor Network (2006a, 2006b, and 2006c) on microfinance and disaster relief. 26 VI SECTION What’s Next? T here is no doubt that more can be done to actions and settlement. Interoperable payments support people with financial services in systems or systems that connect multiple types of times of crisis. Financial inclusion can help providers to the same system are important. These bridge humanitarian programming that focuses on would help to reduce the need for rigid partner- protection and access to basic services with finan- ships or reliance on voucher and other closed sys- cial tools that enable vulnerable populations to tems that do not link recipients to financial services. build assets, better manage economic risks and By the time a crisis happens, it is often too late to shocks, and support livelihoods over the medium address systemic issues to respond to immediate term. Donors, in particular, have an important role needs. Nonetheless, crises present opportunities to to play in shaping the dialogue with countries “build it back better,” by investing in infrastructure affected by crisis by investing in critical “win-win” that should have been there in the first place, or by investments that can benefit the country’s economy expanding services to areas or populations previ- and strengthen the resilience of affected popula- ously excluded. Ensuring that these systems are tions. The following are priorities for relevant responsive to shocks should be a component of a stakeholders, with a focus on policy makers and country’s preparedness strategy. donors. Expedite regulatory reforms that enable digital financial services and mobile money, including Recommendations for supporting crisis the acceptance of alternative means of identifica- environments through financial inclusion tion for refugees to address CDD requirements. Regulatory enablers include regulations on agents, While supporting the ability of affected communi- simplified CDD requirements, and e-money regula- ties to leverage financial services is the ultimate tions. The role of mobile money in expanding finan- goal, this can happen only when a basic financial cial inclusion is well documented, and the benefits infrastructure is in place. Thus it is not feasible to can extend to both local and displaced populations. improve financial services for crisis-affected people without addressing system-wide and infrastructure Provide incentives for private-sector actors and issues. partners to roll out sustainable financial ser- vices. Targeted subsidies should encourage market Prioritize investments in a resilient digital pay- development, specifically mitigating risk to encour- ments infrastructure. Elements of strong, robust, age long-term provision of financial services by pri- resilient, and reliable payments systems include (1) vate operators during periods of crisis. Ultimately, sufficient access points for cash-in/cash-out and FSPs need to continue to provide services well other transactions, whether via mobile phones, beyond the emergency crisis response period. Pri- POS devices, agent networks, ATMs, or branches; vate actors must also adapt to crisis environments, (2) well-managed agent and merchant networks for example, by ensuring that they have adequate that are equipped to manage liquidity needs at risk management and liquidity/provisioning struc- access points; and (3) adequate mobile and broad- tures in place. Humanitarian and development band connectivity to enable real-time, online trans- 27 practitioners must recognize and understand the agents to act as cash-in and cash-out points dur- business needs of private providers and should ing periods of crisis. build in relevant incentives that address the • Develop innovative financing mechanisms to increased risks during the crisis period and take mobilize the resources necessary to address into account the adaptations required to sustain crisis and forced displacement, including con- operations into the future. cessional financing for middle-income countries hosting large percentages of refugees and the use of blended debt-grants financing and guarantee Recommendations for policy makers and mechanisms. The Jordan Compact is a step governments to support host country in this direction.20 First loss guarantee mecha- capacity nisms can also be a useful tool, particularly to Developing countries host the vast majority of the finance refugee-related programs for FSPs. world’s displaced populations and take on enor- These guarantee mechanisms can also incentiv- mous economic and sociopolitical weight on behalf ize private-sector funders to enter the market, of the international community. They cannot be provided they are deployed efficiently and in a expected to finance these costs on their own while well-coordinated manner. managing the strain on services that also affect local populations. Donors and global policy makers Recommendations for donors must recognize the importance of these public goods and enable host countries to support their regarding global programming principles response to crisis. Host countries should be offered Increasingly, the humanitarian community itself tangible assurances that their support of displaced sees the critical need to link to longer-term devel- people will not translate into de facto absorption of opment given the limits of humanitarian funding them into their economies. “Win-win” develop- and the increasingly longer-term duration of dis- ment solutions that improve socioeconomic out- placement. This will require concerted and strate- comes for both host communities and the displaced gic efforts to create deliberate links between should be championed. Donors need to under- humanitarian and development efforts through the stand that these solutions are not only technical, provision of financial services. This could include but they are political as well. Solutions include the the following: following: • Address impediments and incentives that drive • Invest in projects that also support host coun- the behaviors of institutions and programming try priorities. In addition to investments that staff on the ground. Most humanitarian organi- lead to tangible improvements in a country’s zations are guided by donor funding that is com- financial infrastructure, developing and testing mitted after a crisis ensues. These commitments medium-term “win-win” interventions that are short term and require frequent and regular enhance the economic resiliency of both host replenishment. This funding cycle creates an and refugee communities should be prioritized. environment where long-term planning and pro- • Support the creation of crisis-adaptable regu- gramming is effectively impossible. Stefan Der- lations that develop a resilient enabling envi- con, chief economist at the U.K. Department for ronment for financial services for IDPs and International Development, recently proposed a refugees. This includes simplified CDD require- global risk pooling mechanism that would allow ments that reduce constraints refugees and IDPs contributions before crises and make them acces- face when accessing payments infrastructures. sible to affected countries after crises (Clarke and This could include time-bound regulatory flexi- Dercon 2016). bility on the ability of third-party vendors or Middle-income countries, like Jordan, can now borrow at concessional rates, while accessing trade concessions to the 20.  European Union. 28 • Explicitly embed financial inclusion objec- demand for and use of financial services, and tives into humanitarian program design. With their behavioral preferences. As noted in Sec- more secure and longer-term funding horizons, tion II, the needs of different groups vary it is possible to create explicit links between greatly, and a better understanding of how humanitarian assistance programming and finan- financial services can address their financial cial inclusion. Many international organizations needs and livelihoods would greatly improve already have separate teams for relief and devel- program design and targeting. Such research opment in their mandates, and could use finan- can also support increased customer uptake cial services to link the two operationally. One and use of financial services. step in doing so is to more closely share knowl- • Improve the evidence base on specific prod- edge among the internal teams. ucts that have high potential in crisis environ- ments. The role of insurance, particularly disaster insurance, is an area that warrants fur- Future research and learning agenda ther research. Additionally, given the growing trend to digitize payments, more research on Despite the predictability of disasters and the con- understanding the impact of such digitization on centration of displaced people in select countries, well-being and financial inclusion outcomes is the international community has not put enough necessary. Particular attention should be placed focus on embedding rigorous evaluation or on (1) the impacts on the lives of different seg- research of the impacts of various financial ser- ments (e.g., refugees, IDPs, women, youth) and vices provisions into program designs. This is a (2) the sequencing of financial products. missed opportunity to understand where and how • Improve the evidence on the role of financial the humanitarian and development communities services for livelihoods programming. While could optimize the use of financial services to there has been some research on building liveli- improve responses, build livelihoods, and improve hoods in post-crisis recovery contexts, more evi- long-term resilience. Specific evidence gaps include dence is needed on the role of financial services the following: in these models and the types of livelihood pro- • Improve understanding of the demand and grams that work for specific segments of people use of financial services in crises by different affected by crisis. More efforts also are needed to subsegments of those affected by crises. More evaluate the impact of microcredit in crisis con- research is needed on different segments, their texts and its role in supporting livelihoods. 29 Photo by Mohammad Moniruzzaman 30 VII SECTION Conclusion L ooking forward, close coordination among donors, governments, regu- lators, FSPs, and civil society organizations will be critical to improve development responses to humanitarian crises, which are increasing in severity, length, and complexity. Financial inclusion can play an important role in bridging the humanitarian-development divide by providing a plat- form to bring efficiencies to emergency transfers through digital and mobile distribution channels, and more broadly by providing financial tools (pay- ments, savings, insurance, and credit) to promote economic resilience and improved economic opportunities in periods of crisis. While finding sus- tainable solutions to humanitarian crises may seem like an intractable pros- pect, integrating financial services into both emergency and related development programming can be an important enabler of the process. 31 ANNEX 1 Terminology Asylum Seeker  person who flees into another country and applies for asylum, i.e., the right to international A protection under the 1951 UN Refugee Convention (or Geneva Convention). An asylum seeker may be either a refugee or a migrant, but only refugees obtain asylum when their claim is validated. Obligations under the 1951 Convention prevent penalizing asylum seekers that have illegally entered a country. There are 3.2 million asylum seekers globally (UNHCR 2015). Crises-Affected In this paper, this term refers to group of people affected by a conflict or natural disaster, Populations  including those related to climate change. Such groups may be forcibly displaced or not. They include directly impacted communities and host communities in case of displacement. Forcibly Displaced A person who is forced to flee his or her home. Person  There are 65 million people forcibly displaced globally by conflict or violence (UNHCR 2015), including refugees, IDPs, and asylum seekers. Internally Displaced A person who is forced to flee his or her home but who remains within his or her country’s Person (IDP) borders. There are 40 million IDPs globally (UNHCR 2015). Migrant  A person who leaves his or her country to seek a better life abroad (e.g., employment, study, or family reunification). A migrant continues to have the protections of his or her own government, even when abroad. There are close to 250 million migrants globally (Ratha et al. 2016). They remit an estimated US$580 billion to their home countries, of which US$432 billion go to developing countries (World Bank 2016e).  “Environmental migrants are persons or groups of persons who, for compelling reasons of sudden or progressive changes in the environment that adversely affect their lives or living conditions, are obliged to leave their habitual homes, or choose to do so, either temporarily or permanently, and who move either within their country or abroad” (IOM 2007) (emphasis added). Refugee  A person who has been forced to leave his or her country to escape conflict or persecution. A refugee under the 1951 Convention is defined as a person who “owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country.” Refugees cannot be expelled or returned to places where their life is in danger. This definition does not include people who have not crossed an international border or economic migrants. People displaced by natural disasters (~25 million per year) or climate change are not refugees. It is unclear how many have crossed borders or returned, or how many have been displaced in total at a specific date.  There are 21 million refugees globally (UNHCR 2015) of whom 16.1 million are under UNHCR’s mandate and 5.2 million Palestinians who are under UNRWA’s mandate. The number of refugees decreases when they return, resettle, or get naturalized, except for Palestinians who retain their refugee status regardless of citizenship. Stateless Person A person who does not have the nationality of any country. Stateless persons have not necessarily been forcibly displaced, but they fall under UNHCR’s mandate. There are at least 10 million stateless persons globally (UNHCR 2015). 32 Humanitarian Aid and action designed to save lives, alleviate suffering, and maintain and protect human Assistance (or Aid) dignity during and in the aftermath of man-made crises and natural disasters, as well as to prevent and strengthen preparedness for the occurrence of such situations.  According to Development Initiatives (2016), funding for humanitarian assistance reached a record US$28 billion in 2015. Official Development Aid to support economic, environmental, social, and political development of countries. 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Zimmerman, Jamie, Beth Porter, and Ahmed Dermish. 2016. “Digital Financial Services in Post-Crisis Contexts.” New York: United Nations Capital Development Fund. 40 © 2017, Consultative Group to Assist the Poor / State and Peace-Building Fund / World Bank 1818 H Street NW, MSN IS7-700 Washington DC 20433 Internet: www.cgap.org Email: cgap@worldbank.org Telephone: +1 202 473 9594 Rights and Permissions This work is available under the Creative Commons Attribution 3.0 Unported license (CC BY 3.0) http:// creative commons .org/licenses/by/3.0. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Cite the work as follows: El-Zoghbi, Mayada, Nadine Chehade, Peter McConaghy, and Matthew Soursourian. 2017. “The Role of Financial Services in Humanitarian Crises.” Forum 12. Washington, D.C.: CGAP, SPF, and World Bank. 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