Migrant entrepreneurs, crossing borders thanks to fintech?

Lessons from a special workshop on FinTech and Migrant Entrepreneurs, moderated by EM(E)N member ADIE, and held during the MFC-EMN Annual Conference 2018 in Bilbao on 7-8 October 2018.

Various members of the EMEN project’s Community of Practice on “Access to finance for migrant entrepreneurs” are also part of European Microfinance Network. On the instigation of this CoP it was possible to run a special workshop on innovation in offering and rendering financial services to (starting) migrant entrepreneurs.

Development finance organisations invest quite a lot of resource in developing new financial technologies to support refugees and migrants. Interesting developments and innovations take place in countries outside Europe. But (micro) financial intermediaries in Europe can learn a lot and may be interested in introducing some if those new techniques and methods. Two such innovations were presented during the workshop:

  1. An innovation promoted by Finance in Motion in its work as Manager of the SANAD Fund for MSME is creating a digital financial identity in support of FIs rendering services to (Syrian) refugees. Referred to as “Huayati” or “My Identity”, the identity is a distributed ledger solution facilitating secure data repositories.

The identity, which is created, owned, and managed by individual clients, and to which their financial institution or training institution uploads data, was originally designed as KYC software for financial institutions; the identity is thus an overlay that can easily plug into core-banking software. It is based on a permissioned Ethereum network implementation, using authorized nodes, allowing for easy client interaction over mobile and desktop browsers. For more information contact Jacob, Ole Nestingen E j.nestingen@finance-in-motion.com

  1. Taqanu (the name means “to be safe” in the ancient Middle Eastern language of Akkadian) focuses on identity management and enables people on the move to prove their background and previous interactions as they interact with organisations. It first tried to develop an app to assist refugees to access financial intermediaries. Users would also create a “reputation network,” by asking friends and family to vouch that they are who they say they are. After testing a beta version, Taqanu decided to drop the idea since it would require very heavy private data mining.

It plans to partner with a bank to offer basic banking services such as a limited current account and limited debit card. The limits imposed are based on how much proof someone can provide of their identity (someone may be able to use the service only monthly, for example, if they have little data to share). Over time, the app continues collecting data, and the amount of service increases accordingly. See https://www.taqanu.com/


The workshop was moderated by Adrien Gizon from Adie, which supports migrant entrepreneurship in France and abroad (More info: agizon@adie.org). Attendees came to a number of interesting conclusions, some of which are in line with the findings of a recent German study by Swati Mehta Dhawan (Alexander von Humboldt Foundation) “Financial Inclusion of Germany’s Refugees: Current Situation and Road Ahead.[1] The most interesting conclusion for CoP2 access to Finance are:

  • The major barriers to achieving financial inclusion of refugees are behavioural.
  • The group of migrant entrepreneurs and/or enterprising refugees is rather a heterogeneous one with very active financial lives.
  • Financial institutions view the group in general as one with low skills and entrepreneurial abilities, and see them as clients with high risks and ‘low-profit’ because they lack credit and business histories. This is often attributable to the fact that previous experience in their countries of residence is not considered. Experience among financial institutions piloting lending has been the opposite.
  • Existing formal systems are new to migrant entrepreneurs and overall understanding about the benefits of participating in the formal financial systems is low. People struggle to navigate through the rules and processes.
  • Migrants’ financial strategies are also more reactionary than planned as they are not able to think long-term. This results in ‘survival mode’ planning, and low confidence in handling economic and financial emergencies.
  • Migrants tend to turn to informal social networks and to digital platforms such as peer-to-peer lending, crowdfunding and platforms to gather funding from the diaspora, both in their countries of residence and origin.
  • Collaboration with fintechs may offer opportunities to shift to digital payments, build transferable credit histories or offer financial advice through chatbots.

The workshop (and the conference in general) made it clear that a lot is happening outside the (micro) financial systems, developments and innovations that offer new opportunities to migrant entrepreneurs and refugees. But not for this group alone… it offers new chances to speed up inclusive finance at large.

For more information contact Klaas Molenaar, leader of CoP 2 Access to Finance n.molenaar@hhs.nl




[1] https://www.european-microfinance.org/publication/financial-inclusion-germanys-refugees-current-situation-and-road-ahead

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