Public Policy 219: Final Policy Innovation Brief

Pre-Microfinance as a Development Policy

in Syrian Refugee Camps
Prepared by:

Mona Siddique, Elif Selin Ucev, Alper Rutbil, Osagie Obaseki

MPP, Class of 2017
UC Irvine

December 7, 2016

I. Problem Definition
The Syrian Civil War is a humanitarian crisis resulting in approximately 4.8 million
Syrian refugees. Syrian refugees are socially excluded groups facing social, economic, and
health risks, and this stalls their development process (Social Performance Task Force, 2015).
Impoverished and uneducated single and widowed women are especially vulnerable and face
uncertain futures (Mehchy et al., 2014). Further, collapsed social and economic infrastructure
within Syria contributes to even more uncertainty for refugees because even if the war ends, the
majority will return to basically nothing (Mehchy et al., 2014).
The refugee situation in Lebanon is most critical. Over 1.5 million Syrians have entered
Lebanon, which now has the most refugees per capita, 1 in 5 people living in Lebanon is a Syrian
Refugee. However, the Lebanese government does not permit formal refugee camps and
provides no aid. Informal camp conditions are squalid, and the short-term relief is provided by
the UNHCR and a handful of NGOs. Lebanon has a historical policy failure regarding refugee
development. Palestinian refugees are living in Beiruts Shatila camp for over 60 years, so it has
become a permanent refugee settlement. Shatila is notorious for unhygienic living conditions,
poverty, and social exclusion, and no programs or policies presently address long-term refugee
development (Hanafi et al., 2012).
Syrian refugees in Beirut have taken shelter in Shatila. Originally built for 3,000, Shatila
now has 22,000, more than a 25% increase since the War. Syrian Refugees in Shatila are poor
and marginalized, and no policy intervention for their socioeconomic development puts them at
risk of extreme poverty and social exclusion with intergenerational effects
II. Facts from the Literature
Empirical evidence from a study about the socioeconomic condition of Palestinian
refugees in Lebanon that is conducted in 2010 suggests that these refugees face social exclusion,

poverty, and legal discrimination for years after entering the host country (Hanafi et al., 2012).
Palestinians who fled in 1948 to Lebanon are still living in poverty and are legally discriminated
against, which prevents them from mobilizing and decreases their social and economic wellbeing for generations (Namour, 2016). Most refugees remain in camps for year after they first
arrive, and have no major improvement in living conditions (Namour, 2016). The main concern
is permanent refugee status and uncertain futures (Oxfam, 2013). Refugees in Lebanon are
falling into debt in order to pay for household expenses, especially food and utilities, and in
winter month for heating and clothing (IRC Study, 2013). There are no income earning
opportunities that can satisfy their need to pay household expenses on a sustainable level (IRC
Study, 2013). Lebanon maintains an open border policy, so Syrians can live and work there if
registered formally, but there are no formal refugee camps allowed (Masri&Srour, 2013). Since
rents are high in urban areas, many Syrians eventually move into slums, especially the
Palestinian Refugee Settlements (Masri&Srour, 2013). Average household income is 6 USD per
day (for family of 5), most spent on food, rent, and medical expenses (Oxfam, 2013). Female
household heads tend to be poorer compared to rest of population (Oxfam, 2013). Registered
refugees receive UNHCR subsidies, about 90 USD/month based on HH size (Oxfam, 2013).
A study by Masri & Srour (2013) reveals the plight of Syrian refugees in Lebanon. 68
percent of Syrian women are unemployed and not economically active. Due to the absence of a
male household head, many widowed and single women are searching for employment. Burden
of childcare impedes them from employment. Study finds only 6 percent of Syrian women (aged
15 and above) in Lebanon are working. Poorest refugees have low skill sets, so mostly find job
in agriculture or services; most work is informal, with 92 percent without any work contract.
Females earn less than males significantly, and incomes are generally very low. There is poor

occupational health and safety among working Syrians in Lebanon. Further, micro-businesses
opened by Syrians face backlash and discrimination because they pose a threat to similar
Lebanese owned businesses. According to Errighi & Griesse (2016) Policy Report, most of the
Syrian refugees have low education and skill set. Most employed in services and agriculture.
Syrian refugee labor market participation impacts Lebanese at the same socioeconomic status as
them, causing a shortage in supply of labor. Increase in child labor and women HH heads. Need
for promotion of entrepreneurship, better access to credit and financial services. Need for jointventures between Syrians and Lebanese in order to create stronger businesses and more social
cooperation. Concentration should be on employment and entrepreneurship development of
Syrian women and youth.
A University of Oxford, Betts et al. (2014) study suggests that refugees are important for
the host countrys economy, and can be successful if given opportunity in income generating
activities. Refugees were found to make positive contributions to the host state economy, and
their business ventures create employment opportunities for nationals as well (Betts et al., 2014).
Refugees are technically savvy, often use mobile phones in businesses, and adapt to new
technologies (Betts et al., 2014). They also depend on social relationships to find employment,
and try to become independent of humanitarian assistance (Betts et al., 2014).
III. Solution
A long-term approach to sustainable development of marginalized people is premicrofinance, which are 24 month programs focusing on the capacity building of socially
excluded groups through skills-based training and asset transfers. Pre-microfinance is an
innovative policy solution to the refugee development crisis and can be applied in Shatila refugee
settlement. The trainings will be given in the first year, and include health education, social
awareness, financial literacy, and management skills training. Health education includes teaching
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about how to maintain household sanitation, importance of vaccinations, and nutritional

information. Social awareness training includes importance of childrens education, early
marriage concepts, safety measures in the local community, and legal rights awareness. Financial
literacy and management training include how to use financial services, budgeting education, and
introductions to operations management.
In the second year, an asset is transferred to them and a business that is economically
profitable, easily manageable, and socially acceptable for their basic skill set and geographic
location is started. Specifically for refugees, the idea of social cohesion in pre-microfinance is
important because refugees face backlash from the community they enter into (Farhat et al.,
2015). Thus, each small business will be a partnership between a Syrian, Palestinian, and
Lebanese woman of the same SES, and there may be higher chances that integration of the
refugees will occur and they will become less socially excluded because of this. These women
becoming business partners can increase social cohesion and integration of Syrians into
mainstream society. There may also be an increase in the social networks of these women. For
the remaining 12 months, program staff works closely with each business, providing counseling
and technical support where needed, and weekly and monthly check-ins to ensure the business is
functional. After 24 months, the participants join an actual MFI, which is a bank for low-income
consumers, and they grow their business further. An additional component of the 24 month
period is a consumption support component, where basic food supply or money is given monthly
to the participant to allow them to concentrate on business development without worrying about
day to day necessities.
Pre-microfinance is a strategic development tool for refugees because refugees are
displaced and may move continuously, so if they have social and health training, skills for

business ownership, and physical assets, they have built capacities that they can take with them
anywhere. Therefore, even if these women do not open small businesses due to migration, they
have the capacities to do so wherever they settle because of this development program. Premicrofinance has proved successful in India, Afghanistan, and Bangladesh among the most
socially excluded and impoverished groups, and has resulted in positive socioeconomic and
health outcomes for these target populations (Banerjee et al., 2011; Hashemi & Montesquiou,
2011). Similar programs implemented in Guinea and Sierra Leone to refugees in camps have
allowed refugees to increase income and overcome post-conflict socioeconomic problems
(Nourse, 2003).
IV. Implementation
The program will be administered to the target population through an established
microfinance institution (MFI) specializing in pre-microfinance services because these
institutions hold expertise in the implementation of such programs globally, so they will have
infrastructure and capital available to administer this program in this target geography. Since
these MFIs that offer pre-microfinance services do not currently operate in refugee camps, it
would be important for them to partner with UNHCR, which is already on ground in Shatila
offering short-term relief. The government does not support long-term development policies
and prevents the formalization of refugee camps, so involving them would require lobbying
that UNHCR has tried and failed at for years. The most strategic move would be to implement
this program using a contractor based system, where UNHCR can partner with an MFI and
offer this program in Shatila without government involvement.
Moreover an NGO, working with the people, rather than a government council, will erect
the pre-microfinance program as not only have NGOs played a significant role in developing
financial services for the poor and downtrodden, but the7 also seek an all-encompassing and
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collective mission in carrying out its task. This would be best realized by the program allowing
working single women in refugee camps to be socially and economically viable being and then
directed to have their own businesses. When the Syrian refugee women are provided their
businesses integration with Palestinian refugee or poor Lebanese women, this would be
acceptable by the local community. Implementation, of course, is not as easy as it seem at this
stage.
Chiefly, for a successful integration between two different nations women, they have to
accept working along with each other. Although social awareness trainings are expected to be
useful for the aim, local community may still resist to this favor which is provided to a different
community instead of them. When we consider that the refugee camps are around the low
income areas, this resistance would be stronger than it is estimated. The program coverage
should be explained well to the host community. They should comprehend that the favor is not
only for the refugees, but also for them. The women who are eligible among them would have a
chance to have a job as long as accept working for each other. Additionally, this programs
psychologic aspects should be explained to host community. These people escaped from the
war and making huge efforts for only surviving. They have very little expectations from the
life. By this program, they could hold on to life tighter. Empathizing with the vulnerable
refugee women population could help people to integrate them into their community and accept
this program more properly.
In times of international humanitarian crisis where the lives of many are contingent on
the international community for financial and logistical assistance, a corresponding necessity
for the supervision such assistance is just as essential. The supervision of financial institutions
is commonly divided into two components, off-site and on-site supervision; off-site supervision

is intended to offer a general appraisal of the dependability of financial institutions, provide

supervisors an early notice of possible complications and assist field supervisors to prepare for
their on-site inspections. (Rosengard, 2010) On-site supervision is based on field visits and is
directed to deliver internal data verification, external data validation and qualitative information
on management, customer and market conditions. (Rosengard, 2010) Both components could
be utilized in evaluating key dynamics of the pre-microfinance program such as gauging the
headway of small businesses, measuring the transferring of financial assets, the use of financial
services and savings behavior as well as ascertaining household income.
Such steps may be constructive in inhibiting fraud and protecting consumer rights.
Additionally, the evaluation of critical details related to health and social vitality such as basic
literacy, household sanitation, and the comprehension of social and legal rights could be
assisted by a mechanism akin to the UNRWA or the UNHCR, whereby activities are evaluated
based on their effectiveness, relevance, efficiency and impact and sustainability. (UNRWA,
2016)
V. Feasibility
The refugee camps in Lebanon are informal camps. Refugees are been registered when
they enter into the country but there is no official implementations and financing for refugee
camps. If we consider that microfinance program will be also conducted by a microfinance
institution (MFI), our program will not be a burden on government budgets. We are expecting
training costs to be low since they will be held in the refugee camps. So only initial cost is staff
payments. MFIs and NGOs will also be providing training to staff. For microfinancing costs,
there is already loans and credits provided by MFIs, WorldBank (WB) and United Nations
(UN) for micro finance trainees.

MFIs specializing in pre-microfinance are specialists in this field, and they are able to
implement such programs sustainably, considering financial constraints. Additionally, these
MFIs have capital and infrastructure to implement these programs on large scales, examples
exist in India, Bangladesh, and Afghanistan of how these programs are implemented
sustainable on large scales. The policy instruments required in this innovation, the training and
asset transfer, are already built into the MFIs core competencies, so using the MFI as a
specialist or expert and using the UNHCR as a organizer in this process will result in a very
feasible intervention that will not impact the government. Since Lebanons government does
not involved with the refugee camps officially, we will not face with long bureaucratic
processes. Also all the policy designed to be conducted by an NGO MFI and UN in
collaboration. So we will not need political support from government.
VI. Evaluation
The pre-microfinance program will be evaluated through program evaluations by
UNHCR, which often conducts research on the interventions it oversees or implements. Since
the program is 24 months, the evaluation will be once the program ends and the women are
formally given their small enterprises to manage. So, the program evaluation would be at least a
3 year study, with semi-annual surveys and in-depth interviews with participants. It is important
to remember that refugees are mobile groups due to uncertain futures, so a longer program
evaluation may be subject to a higher attrition rate. In this evaluation, there must be a baseline
survey given before the 24 month period begins and when the 24 month period ends in order to
have baseline results to compare with.
The evaluation will cover all policy instruments used in the program, health education,
social awareness, financial literacy, and management training. The goal is to see improvements
in each of these areas. Health education indicators include: vaccinations among children,
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household sanitation improvements, and dietary diversity and nutrition. Social awareness
indicators include: children in school, early marriage concepts, safety in local community, and
awareness of legal rights. Financial literacy and management training indicators include: bank
account ownership, savings behavior, credit use, insurance, asset retention, growth of assets,
number of employees hired, break-even points, and annual revenue of the enterprise.
VII. Conclusion
The Syrian refugee crisis is a humanitarian tragedy that has long-term social and
economic implications for the region. Therefore, development policies and programs require a
long-term approach and a focus on financial independence efforts within the refugee camps that
target the most vulnerable refugees, widowed and single women. Pre-microfinance programs as a
development policy will allow for a long-term approach to the socioeconomic development of
Syrian refugees because it is a comprehensive method that focuses on increasing inclusion,
capacity building, and assets.

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