The Role of Financial Services in Humanitarian Crises

More than 75 percent of adults who live in countries that are coping with humanitarian crises remain outside the formal financial system. Financial inclusion would provide both refugees and residents with a diversified set of financial products (including savings, remittances, credit, and insurance) that are critical for vulnerable communities as they try to mitigate shocks, build up assets, and promote local economic development. Changes in the methods of distributing emergency relief are also opening up pathways to financial inclusion. Aid agencies are moving from emergency cash transfers to digital payments via electronic cards, presenting new opportunities to link displaced people to a broader array of financial services.

This timely paper—a collaboration between the World Bank’s Middle East Finance and Markets team and the Consultative Group to Assist the Poor—provides an important framework for understanding the role of financial services during periods of humanitarian crisis. It offers specific guidance to development partners, governments, and financial market actors by outlining operational lessons for financial-sector interventions. By doing so, the authors have made a significant contribution that will help advance the global policy discussion and encourage further research into the role of financial services in building sustainable livelihoods for people in crisis.