Following the realization that refugees can be emerging economies in their own right, Western Union and Mastercard have come together to turn refugee communities into a new customer set.
According to the UNHCR, Kakuma refugee camp has 164,571 registered refugees and asylum-seekers. UNHCR notes that the camp hosts more than 500 merchants who sell farm produce, hardware and electronics and clothes.
Tearsheet reports that Western Union and Mastercard are working on creating a digital infrastructure model for refugee camps, with Kenya as their test bed, focusing on mobile money, digital vouchers and cards that remove the intermediaries and losses associated with in-kind donations, brings funds directly to beneficiaries and gives them some control over their finances.
The two corporates plan to use Mastercard’s digital voucher program to provide chip cards to refugees and host community members. The cards would be loaded with “points” that the holder can spend on everyday purchases.
Gregory Matthews, deputy director of economic programs for cash initiatives at the International Rescue Committee says that refugees manage money in a number of different of ways such as receiving aid in form of cash, others are issued with debit cards and other use money transfer services like Western Union.
90-percent of the billions of dollars being moved each year between government agencies and NGOs are in kind aid: food, clothes, books, tents. Just five to ten percent is delivered in cash. Mastercard and Western Union want to make it possible for refuges to receive more cash either through mobile money or money transfer. The cash received will be loaded into the cards mentioned above and the refugees would have the power to choose how to spend the money.
“What they need most is financial empowerment, dignity and opportunity. So when a refugee gets even a tiny bit of money and can decide to spend, save or invest it, it gives them back dignity, choice and allows them to take a little control of their lives,” said Maureen Sigliano, head of customer relationship management at Western Union.