Study indicates need to digitally integrate access to goods, services and finances for refugee communities

With more than 65 million people around the world currently displaced from their homes due to political conflict and natural disasters, there is a growing need to find better ways for refugees to achieve self-sufficiency and become economic engines in their host countries.

On World Refugee Day, Mastercard and Western Union announced a collaboration to explore the development of a digital model to help refugees more easily access basic human goods, services and finances within refugee settlements. The aim is to enable refugees, their host communities and donors to send and receive funds digitally, allowing for more transparency and long-term empowerment of refugees.

(TOP: Mohammed Ishmail Abdallah, a refugee and trader at Kakuma 4 refugee camp demos how the Bamba chakula, a ‘restricted cash transfer’ works. The cash is sent through a mobile phone and can only be redeemed for food by the refugee recipients. Photo: Martin Karimi /WFP Kenya).

Over the last year, Mastercard and Western Union examined the needs, challenges and opportunities for refugees and their host communities at two settlement camps in northwestern Kenya. The findings have led to the development of Smart Communities: Using Digital Technology to Create Sustainable Refugee Economies, a blueprint that would combine digital access to remittances, banking, education, healthcare and other basic needs in way that is unified and trackable.

“Today’s camps were not built to sustain a global refugee crisis of this magnitude,” said Tara Nathan, Executive VP of Public-Private Partnerships at Mastercard.Our plans to reinvent the existing model can help the world’s refugee populations achieve self-sufficiency faster, while also contributing to the economic growth of their host communities.”

“Refugees across the world want to be empowered to break the chains of dependence and to rebuild their lives in meaningful ways, while also contributing positively to their host communities,” said Maureen Sigliano, head of customer relationship management at Western Union. “The new digital infrastructure model would focus on solutions that might include the delivery of mobile money, digital vouchers, prepaid cards, and track other goods and services. The goal is to drive personal empowerment, stimulate growth and promote social cohesion among the world’s refugee populations, while driving better governance and transparency.”

The UN High Commissioner for Refugees (UNHCR) estimates that the average length of a refugee settlement dependency is approximately 26 years. Many of today’s refugee camps founded in the 1960s and 70s, were built as a temporary solution and are unable to sustain today’s systemic long-term dependence.

The qualitative research conducted at the Kakuma and Kalobeyei camps in Kenya uncovered the complexity of needs in the camps and the surrounding community. The Mastercard and Western Union blueprint would address these various needs by:

  • Laying the groundwork for a set of multipurpose transactional tools that refugees and residents can access, which are optimized to work in low infrastructure areas.
  • Giving residents greater control over their livelihoods, well-being, and dignity, while providing agencies access to data that informs community planning and development.
  • Providing a digital platform which would serve as a unique identifier for both local and refugee populations, advancing the critical goals of social cohesion and cooperation across the settlement.
  • Encouraging adoption of digital payments as an entry point to the formal financial system and can be extended to incorporate a wider set of use cases.

Both Mastercard and Western Union are founding members of the Tent Partnership for Refugees, a coalition of more than 70 companies committed to addressing the global refugee crisis.

“The private sector is uniquely positioned to bring greater innovation and ingenuity to this crisis,” said Gideon Maltz, executive director of Tent. “Today’s announcement offers an exciting new approach to helping refugees, and reflects the contributions that companies can make when they identify problems, collaborate with each other, and work tirelessly to find and fund scalable solutions to fix them. It’s our hope that initiatives such as these encourage even more companies and entrepreneurs to step up.”