Beyond Making Ends Meet: Urban Refugees and Microfinance

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Vansant, Jerry

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The purpose of this paper is to determine the types of programs, partnerships and policies UNHCR should support to improve microcredit and microsavings for urban refugees in the informal economy. I set out to accomplish this purpose in partnership with the Women’s Refugee Commission, an evidence-based advocacy organization that advocates vigorously for laws, policies and programs to improve the lives and protect the rights of refugee and internally displaced women, children and young people, including those seeking asylum—bringing about lasting, measurable change. Though independent, WRC often collaborates with UNHCR and other stakeholders to determine better practices and approaches for protecting refugees, especially women and youth.

There are approximately 10.5 million refugees worldwide, more than half of who live in urban areas and only a third in camps. Refugees in protracted situations make up 68% of the refugee population, meaning they are not sure when or if they will return home. The average length of their displacement is 17 years, hardly a length of time appropriate for short-term, humanitarian interventions. The trend of urbanization does not apply exclusively to refugees. More than half of the world’s population lives in urban areas, 1.5 billion living in poor urban and slum areas.

Urban refugees typically live in the same communities as urban poor. Both groups operate primarily in the informal economy, face bribery and harassment from police, and have inadequate social safety nets such as healthcare, education and housing. Women are particularly vulnerable to exploitation and gender-based violence under these circumstances. Refugees face additional challenges as they often do not have proper documentation, clear legal status or rights to work, or move as do their host neighbors. These challenges result in additional protection concerns and obstacles to generating an income and becoming self-reliant.

Microcredit and microsavings are approaches that development actors are exploring to help protect and reduce poverty among urban poor, but urban refugees are often left out of these microfinance schemes. Refugees have expressed the need for microcredit to grow their informal businesses, and microsavings schemes to help establish financial security. Utilizing financial services could help many refugees achieve self-reliance. I identified four categories where UNHCR can support microfinance: partnerships, programming, policy and evaluation and advocacy. I developed nine different options within these categories and analyzed them against three criteria: ensure political feasibility, consider UNHCR’s financial limitations, balance refugee protection concerns with economic stability. I ultimately recommend all nine options for UNHCR to consider for implementation.


  1. Strengthen and increase partnerships with international and national development actors and host government ministries to carry out microfinance programs.

  2. Strengthen and increase partnerships between field officers, country staff, city officials and development groups to carry out microfinance programs.


  1. Pilot microcredit and microsavings programs in select urban locations over longer project time horizons. Emphasize microsavings first and more broadly, and only apply credit to refugees who meet the appropriate criteria. Use both sustainable MFI models and subsidized and non-financial service models depending on the needs of the population in the pilot location.

  2. Build the capacity of field officers, implementing partners and future MFI partners to successfully extend microfinance services to urban refugees.

  3. Pilot guaranteeing loans for refugees who show potential to start and grow a scalable business and who could then hire other refugees and urban poor.

Policy and Evaluation

  1. Allow UNHCR staff to commit funds to microfinance projects for up to five years before having to request an extension for project funds.

  2. Rigorously monitor and evaluate not just the financial, but also the social impact of microfinance programs for urban refugees.


  1. Lobby donors for increased self-reliance and livelihood funds intended to support and partner with existing MFIs, government agencies and development NGOs in order to offer more savings and credit options to refugees.

  2. Continue advocacy efforts with host national and local governments and MFIs. Use messages of self-reliance and contributions to local economic development. The goal of advocacy should be to ensure an enabling environment for work and financial services for refugees. UNHCR has issued guidance and explored microfinance previously in a limited number of ways. However, my recommendations apply specifically to urban refugees predominantly in non-conflict settings. UNHCR and development actors have tended to focus primarily on microcredit. However, credit should be applied cautiously to refugees who meet specific criteria. Microsavings is a more appropriate approach for a wider range of refugees, especially the poor and vulnerable who risk going into debt. The poorest and most vulnerable often need a graduation model of financial services. Another approach for the poorest requires the provision of social services like healthcare, education, business training, or one-time asset transfers alongside credit and savings.

Credit or savings alone is not the solution for refugees to protect themselves or grow their household income. Advocacy, policy changes and partnerships are necessary as UNCHR and WRC move forward in supporting microfinance programs for urban refugees in the informal economy.





Sylvester, Abigail (2011). Beyond Making Ends Meet: Urban Refugees and Microfinance. Master's project, Duke University. Retrieved from

Dukes student scholarship is made available to the public using a Creative Commons Attribution / Non-commercial / No derivative (CC-BY-NC-ND) license.