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Access to Microfinance Services
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Populations forced to flee conflict, persecution or natural disasters lose many of their assets and possessions during the scramble to safety. The most vulnerable invariably need immediate, and often long-term, social assistance.
Some displaced communities set up their own mechanisms of pooled savings and loans which enable members to borrow money at agreed terms and interest rates. More formal types of financial services can improve the lives of forcibly displaced people by empowering them to diversify their income sources, meet basic needs and cope with emergencies. While accessing financial services does not guarantee increased income, it can reduce the dependency on borrowing from locals or wealthier refugees at high interest rates. It can also prevent sales of precious household assets in times of need.
Microfinance is one element in the facilitation of refugee self-sufficiency and the promotion of sustainable livelihoods. Successful microfinance projects tend to be complemented by other interventions such as basic financial education or business training, which UNHCR and its partners help provide.