Finance in Displacement – A Gendered Perspective
What are the financial health realities faced by women refugees in Jordan and Kenya?
In this issue of Fresh FINDings we feature research from Jordan, led by Swati Mehta Dhawan and Hans-Martin Zademach of Katholische Universität Eichstätt-Ingolstadt, and Kenya, led by Julie Zollmann in collaboration with Cate Wanjala. The study focuses on how refugees and migrants manage their finances in new surroundings. Please visit the Journeys Project at Tufts University for previous studies, ongoing research, videos, maps, and artwork on refugees and migrants in the Middle East and Mediterranean, Latin America, and Africa.
This Month…
Gender and Financial Health
New podcast discussing our findings on financial displacement in Jordan and Kenya
Summary of remarks made by Hans-Martin and Swati at European Microfinance Week 2020
FIND Symposium
Gender and Financial Health
by Swati Mehta Dhawan and Julie Zollmann
As we finish analyzing data from three rounds of interviews in Kenya and Jordan, we take a fresh look at our FINDings through a gender lens. We spoke to 42 women in Kenya and 45 in Jordan, all living outside of camps in towns and cities. In Kenya, another thirteen women in Kakuma camp wrote their financial histories for us.
The gender of participants, as expected, was found to impact financial health.1 For instance, a majority of the lowest-income households were women-headed. Women face distinct challenges in earning income. First, the kinds of jobs that many refugees in Jordan have, such as construction, are not suited to women. These are better suited to men, who often visit the market or the city square to get picked up by contractors for day jobs. Men are also able to take on side jobs to earn extra income. Women tend to engage in small-scale trading, home-based business, cleaning in private houses or offices, or beauty services (at home or salons). They are not able to take on multiple jobs due to their caregiving responsibilities. Women also have relatively less access to diverse forms of capital than men.
Most of our women participants are making every effort to support their families financially. Their incomes are always critical, but often small. Yet every dinar or shilling helps buy food or medicine for the family. One key group facing this issue are women-headed households, especially those with young children. With few sources of income, they have a limited set of coping mechanisms in case of a shortfall of cash or a financial shock. They are highly dependent on cash transfers from NGOs. When these are unavailable, they rely heavily on loans from friends or family, buying on credit from corner shops, and one-off private donations. In Jordan, we see a worrying trend of adolescent boys leaving school to work and help meet their family’s financial needs. We also saw some women resorting to formal micro-credit, intended to build small enterprises, to pay for urgent medical and household expenses. As borrowers with no business income, they found it extremely stressful to repay the fixed installments.
Women’s lower incomes, and their limited options, create real vulnerabilities. For two young Somali women in Kakuma, the only way out of the camp was a highly competitive scholarship to study in Canada. Each year, only five girls are selected. Both girls had put school above everything else to boost their chances. One of the girls got the scholarship and is now looking forward to her new life outside the camp. The other did not get selected and worries that her family will marry her off. She found a job and thought that she had staved off her fears of being married off, but after only six months she lost her job to the COVID-19 pandemic. She is once again at risk of being forced into a marriage she does not want.
In Jordan, we observed young women turning to marriage to cope with financial hardships. We also saw this with single mothers, exhausted from the dual responsibilities of managing their homes and worrying about paying for rent, food, and their children’s needs. One of our female participants, a single, divorced Syrian woman, had recently managed to open a small business selling clothes. She rented a shop and registered her business, which is still challenging for refugees despite many policy reforms. Shortly after that, she received a marriage offer from a Jordanian man on the condition that she not work after getting married. She agreed and closed her shop. Alas, she could not get married as she did not receive security clearance from the Ministry of Interior. The man offered her 1000 JDs as compensation for her loss. So, she lost both her business and the prospect of financial security through marriage.
The tendency to rely on marriage makes sense. Getting married provides the prospect of not just financial security but also physical safety and social acceptance. Many of our female participants had experienced threats to their safety: some faced sexual harassment at work or from their so-called ‘well-wishers’ who had supported them financially in difficult times. But marriage is no guarantee of security for everyone, as we have seen above. For example, two female respondents in Jordan had gotten married at a young age but were later divorced due to financial struggles. However, with the hardship caused by COVID-19, both of them are considering getting back with their husbands.
Our female participants’ financial journeys were punctuated by the challenges that come with getting married, divorced, or separated. These events were almost always talked about in discussions related to their financial struggles. They also spoke of how overcoming these challenges has been their biggest achievement and how they gained confidence through years of managing everything by themselves. In Jordan, we observed that older women were more confident than the younger ones, as they earned their confidence from years of displacement.
Rula (36), one of our Iraqi respondents, has been living in Jordan for nine years with her three children. She shared how she adapted to all the challenges she faced in Jordan, including the divorce from her husband:
“[Sometimes] I have mental issues, even full psychological devastation. For all the years I have been in Jordan, I have tried to commit suicide many times. After some years, I realized I am losing it. That my youth is gone. I thought, until when would I be buried alive, I must adapt. Whether I like it or not, this is my reality. So, I started to think positively. That tomorrow would be better. I switched on my ambition hormone and happiness hormone. Without these, I would be dead already.”
When we met her in the last interview round in November 2020, she sounded exhausted. She had not been able to find much work providing at-home beauty services due to COVID-19. The 210 JDs received in cash assistance every month was barely enough (she paid 170 JDs for rent). She said that she is fed up and that her children are always asking for things. Her son begs her to leave school so that he can help her, but she will not allow it. She mentioned again how hard it is to be a single mother living in a foreign country, saying, “mountains cannot take what I have endured” (a common phrase in Arabic to refer to incredible persistence).
Similarly, in Nairobi, women thrust into public life because of a divorce or the death of a spouse initially felt overwhelmed, but then felt relieved as they learned that the outside world was not as scary as it seemed. Having a life, relationships, and income outside the home fueled a new sense of confidence and belonging. Many of our respondents wish they had done this years earlier in their displacement.
Programmatic Recommendations
It is clear that refugee women have unique needs. Before jumping into our programmatic recommendations, we would like to caution that for longer-lasting improvement in the financial health of female refugees (or refugees in general), the most essential preconditions are legal recognition and important rights — to decent work, to mobility, or to set up a business — which now are neither guaranteed nor easily realized by all refugees in either country. The following are ideas to be considered by international NGOs, governments, financial institutions, and private sector actors, as they design their programs focused on refugee women.
1. Support women to expand their social networks and gain exposure outside the home:
Without a public life outside the home, women do not build the critical skills (like language skills), networks, confidence, exposure, and incomes critical for their financial health and overall happiness. Having the security and space to start building networks earlier in displacement would benefit women refugees in both Jordan and Kenya.
In Jordan, many organizations offer short trainings and awareness sessions for women, which provide safe spaces for social interaction. These new contacts are a valuable source of information (often through WhatsApp). Yet many felt that these connections were superficial, short-lived, and did not allow for deeper friendships. More longer-term engagements, mentorship programs, cross-cultural apprenticeships, and language trainings could enable women to expand their networks and gain the confidence to venture outside the home.
2. Support women’s small-scale income-generating activities: In Jordan, vocational trainings are offered to Syrian women, but very few non-Syrian women are included. There are often age restrictions (e.g., up to 30 years), excluding older, yet interested, women. Even then, most of these trainings offer skill-building in markets that are already saturated or have low demand.2 In fact, we see that in both Kenya and Jordan, skills training may not always be needed. Instead, programs to connect newer arrivals to mentors or women business owners who might host them as short-term apprentices could help them build the confidence they need to start trading outside the home.
Women’s businesses frequently stop and restart as women address family issues or are forced to divert capital for other needs. To keep their businesses alive, they need periodic cash infusions, often of very small sums. This is on stark display due to the COVID-19 crisis. As unemployment rises, women are likely to drop out of the labor market altogether. Men can still go out and look for odd jobs, but women find this increasingly difficult. However, given the kinds of small trade women are doing (for instance, in Nairobi, they sell materials, fruits, tea, coffee, and cooked foods from their home region), very small cash infusions—often less than $30—can be enough to help them restart after a major setback.
3. Support women’s savings activities: Women have the primary responsibility of managing household expenses and can do so very skillfully. Many women were saving small sums —usually in coins or small currency notes — by hiding them in a can or piggy bank. However, they might disagree with the term ‘savings’ because the money would likely be spent within two months on unforeseen expenses. But even these small amounts provide some financial cushion and, more importantly, peace of mind. Tools that support a savings account or even promote automatic savings could go a long way to enhance the savings cycle. As financial institutions think of such products, their design must provide for mental accounting,3 privacy, flexible contributions, easy liquidation, and minimal costs.
In Kenya, women and men both joined savings clubs when their cash flows allowed. Though more recent arrivals are barred from saving on their own mobile money accounts, those with access also valued this as a safe place to hold short-term savings. The humanitarian community should continue to advocate for refugees’ access to this vital utility.
4. Expand psycho-social support to address psychological barriers: We saw that poor psychological wellbeing had serious implications for refugees’ ability to leverage economic opportunities, build social networks, and manage money. The women in our sample have been surprisingly open about the psychological challenges they face due to their increased financial and household responsibilities. In Jordan, some NGOs, as part of their programs for women (mostly Syrian women), realized the need for psycho-social support and started offering it. At least two of our participants shared how counseling helped them overcome serious suicidal thoughts. Such programs should be expanded and be provided by trained therapists, at least for critical cases. They must also increase outreach to men, who, unlike our women participants, were not willing to seek the professional support needed to address their deteriorating psychological health.
5. Increase awareness about legal rights and recourse to instill a feeling of safety: We found that it is not just social norms that lead to the isolation of women, but also the fear of harassment and the fear of not being able to seek their rights in case of an injustice. We heard many stories of women who did not get their rights after a divorce, faced gender-based violence at home or harassment at work, or could do nothing when their children were bullied. As refugees, and lacking the confidence that they would be taken seriously, they tend not to pursue legal recourse. Increasing awareness about their legal rights is critical for refugee women, not only to reduce their vulnerability, but also to instill confidence to step outside the home to work.
New podcast discussing our findings on financial displacement in Jordan and Kenya
To learn about our research findings in another format, check out our recent podcast episode, featuring Julie Zollman and Swati Mehta. The podcast episode discusses both the financial and nonfinancial needs that refugee women have.
Summary of remarks made by Hans-Martin and Swati at European Microfinance Week 2020
Last November, Hans-Martin Zademach and Swati Mehta offered remarks at a panel that asked the question: “Where did the 'inclusion' in 'financial inclusion for displaced people' go?”
Drawing on the above-described research, Hans-Martin and Swati noted that the needs and uses of financial services among refugees change as their circumstances and livelihoods progress or diversify. They recommended that, to secure financial inclusion for displaced persons, issues around documentation and refugees’ legal status need to be resolved. In other words: securing financial inclusion for refugees requires securing their very rights.
FIND Symposium
We are excited to announce the Finance in Displacement (FIND) Symposium! Taking place on April 20-21, 2021, this virtual symposium will explore the financial integration of refugees, drawing on recent research conducted in Jordan, Kenya, Mexico, and Uganda.
The symposium will disseminate and discuss findings and provide programming recommendations based on our research insights about how refugee and migrant households manage their livelihoods and finances, and whether and how they integrate into local economies. Make sure to keep checking the FIND Symposium webpage to register and stay up-to-date on our plans for the Symposium. We look forward to seeing you there!
Fresh FINDings is made possible through a partnership among Tufts University, the Katholische Universität Eichstätt – Ingolstadt (Catholic University or KU), the International Rescue Committee and GIZ. Fresh FINDings also features work sponsored by Catholic Relief Services, Mercy Corps, and the International Organization for Migration.
Contact: Kimberley.Wilson@tufts.edu
For more see Journeys Project
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A displaced person is “financially healthy” if they can meet their daily needs or the needs of their family, weather a financial set-back, comfortably manage their debt, pursue opportunities in education or enterprise, and extend their planning horizons.
Examples of skill-building trainings attended by female participants in Jordan include sewing, beauty services, and accessory making.
Mental accounting is a concept in behavioral economics. It says that individuals classify funds differently and are therefore prone to irrational decision-making in their spending and investment behavior. For instance, people may use different mental shortcuts to make associations between the purpose of saving and mechanism for savings. For example, they may save in a small jar for rent and in a savings group for business investment. Another example would be of refugees who receive cash assistance in their account or mobile wallet. Previous studies show that they are not likely to save in this account as they associate it cash assistance which is meant for expenses and likely to be fully withdrawn.