International study investigates inclusion of refugees into the financial system

How do forcibly displaced persons manage their money matters in everyday life? What channels do they use and with which measures can refugees be supported in order to be given better access to needs-oriented financial services, for example in the area of start-up financing? A KU research project currently seeks to investigate these questions. The project is funded by the Federal Ministry for Economic Cooperation and Development with one million euros. The three-year study “Finance in Displacement (FIND)” is implemented by the KU Professorship of Economic Geography (Prof. Dr. Hans-Martin Zademach) in collaboration with the Center for Flight and Migration. The KU was able to win Tufts University in Medford/Somerville near Boston and the International Rescue Committee in Washington as scientific project partners. The comprehensive empirical investigation is carried out in Jordan and Kenya.

While the majority of public debates around flight and migration in Europe center around consequences for our own societies, we often tend to ignore that developing countries are also confronted with a high number of refugees. Especially in these countries, it is crucial for refugees to have the possibility to keep their money safe or to be able to receive financial support from friends and relatives. This basis will allow them to make better use of their skills and develop their full potential and thus actively contribute to the economic development of the host country. Recent studies show that the economic contribution of refugees even overcompensates initial aid and support by the host country in the medium term. “The access to needs-based financial services is a crucial pillar of sustainable economic development. We will investigate correlations at the interface between the topics of flight and migration, humanitarian aid and development of financial systems, which have been hardly touched upon in recent research and practice to date”, explains Professor Zademach. The project will help to better understand the correlations and thus fill global knowledge gaps.

In their fieldwork, the team of German and American scientists wants to focus on refugees who are not living in camps and who have lived in their host countries between two to four years. They will take into account both individual persons and households as well as general framework conditions such as national legislation or initiatives by international and humanitarian players. The team chose Jordan and Kenya as partner countries for the German development collaboration – a choice which will enable comparative analysis. On the basis of their research results, the scientists want to find out how concepts and measures for improvement of the financial integration of refugees in development politics can be developed further. “We hope that our research will provide important stimuli for the G20 initiative ‘Financial Inclusion of Forcibly Displaced Persons’ which was initiated in Germany.”, says Zademach.

This research project is the first initiative to develop out of an agreement which was concluded between the KU and the Federal Development Ministry in late 2017. Back then, the Development Minister Gerd Müller and KU President Prof. Dr. Gabriele Gien signed a memorandum of understanding on a collaboration in research projects in Africa.