Forcibly Displaced Persons in Mauritania Face Financial Exclusion

In Mauritania, accessing financial services is a challenging task for refugees and forcibly displaced persons. A recent study by the United Nations High Commissioner for Refugees (UNHCR) highlights the difficulties faced by these individuals in obtaining credit from formal institutions.

Barriers to Financial Inclusion

Fear of Defaulting on Loans

Fear of defaulting on loans is a major concern for refugees, limiting their access to financial services offered by banks and microcredit schemes. According to the UNHCR, 95% of forcibly displaced persons are illiterate, making it challenging for them to navigate complex financial systems.

The lack of social capital is another significant obstacle, as many refugees do not have the necessary connections or guarantors to provide collateral for loans. “Our religion does not allow for usury,” said a key informant from ANAPEJSUPPLY SIDE BARRIERS. “What is needed is a moral guarantee, by people who know the person.”

Country’s Geography

The country’s vast and sparsely populated geography also poses challenges to financial inclusion. With only 0.5% of the land being arable, physical access to financial institutions is limited, particularly in rural areas.

Regulatory Barriers

Lack of appropriate documentation is another significant hurdle for forcibly displaced persons seeking to access formal finance. Refugees can legally open a bank account if they have been issued a National Identity Number and can provide proof of address. However:

Those living in camps may not have a recorded address.
Urban dwellers are expected to provide their current address to UNHCR.

The study highlights the need for improved reporting and KYC requirements to ensure compliance with existing mandatory reporting requirements.

Way Forward

To advance the financial inclusion of forcibly displaced persons in Mauritania, we need:

Upgraded bank regulatory standards and stronger supervision to improve banking sector soundness and banks’ ability to expand credit and foster financial inclusion.
Specific regulations for mobile money services to ensure that refugees can access these services.

The GSMA Regulatory Index in Mauritania reflects some limitations in terms of authorization procedures, consumer protection, KYC, and agent network, highlighting the need for regulatory reforms.

Conclusion

Forcibly displaced persons in Mauritania face significant barriers in accessing financial services due to lack of documentation, social capital, and physical access. To address this issue, there is a need for:

Improved reporting and KYC requirements.
Upgraded bank regulatory standards and stronger supervision.
Specific mobile money regulations.

The UNHCR and the Government of Mauritania must work together to ensure that refugees are not left behind in terms of financial inclusion.