MICROFINANCE AND FINANCIAL INCLUSION IN LONG–TERM REFUGEE CAMPS – A CASE STUDY FROM KAKUMA REFUGEE CAMP, KENYA

Refugee camps are set up with the ultimate goal of providing immediate protection and offering basic services to people who have been forced to flee their homes due to violence, conflict, or persecution. The divergence of a short-term response to a long-term problem results in a withholding of refugees’ rights. Restrictions on essential rights, such as the right to work and freedom of movement, significantly affect refugees’ access to the labor market and decrease the likelihood of being financially included. The aim is twofold: firstly, to discuss the potential of microfinance inside refugee camps, and secondly, to develop an adapted framework of the Theory of Change for the pathfinder project, implemented by the Jesuit Refugee Service in Kakuma refugee camp, Kenya. Finally, program specific as well as general recommendations to design such a Theory of Change for programs operating inside long-term encampment structures, will be provided. It is argued, that microfinance can be an effective tool to partly bypass restrictions being placed on essential rights and that it is vital that programs are adapted to suit a long-term refugee camp context. The design and revision of a Theory of Change, both before and during a microfinance program, can significantly increase its success and sustainability. A triangulation of sources – expert interviews, primary and secondary sources, exemplary Theory of Change – serves as the basis to critically assess the link between the long-term refugee encampment, refugees’ poor social-economic performances, and microfinance as a potential tool for financial inclusion.