Investing in Solutions: A Practical Guide for the Use of Microfinance in UNHCR operations
Audience and Purpose of the Practical Guide
The reduction of dependency through economic empowerment and the promotion of self-reliance are at the heart of UNHCR’s core mandate to protect and promote durable solutions for Persons of Concern (PoC). Typically, this involves a variety of short and longterm interventions and therefore is central to an integrated livelihoods approach. Under certain conditions, microfinance, if well planned, is one of the tools that can contribute to the enhancement of the capacity of PoC, particularly women who represent 70% of microfinance clientele worldwide, to generate income and improve their standards of living. However, microfinance is not a panacea for all the socio-economic problems facing PoC and therefore should be considered carefully, and in partnership with development actors, when assessing its potential use. It is a specialized field that contributes to longerterm development goals.
The practical guide has been developed for potential managers and implementers of livelihood programmes (programme staff, field staff, protection officers, senior managers, etc.) considering the use of microfinance as part of a broader livelihoods strategy. The policy framework is specifically addressed to UNHCR decision-makers.
The practical guide builds upon the UNHCR/ILO Introduction to Microfinance in Conflict-Affected Communities (2002) and Lessons Learned from UNHCR’s Experiences with Microfinance (June 2010), as well as evolving practices in the field of microfinance. It aims to update and replace the guidance provided in Chapter 4 of the UNHCR Programming Manual.2 The guide is meant to provide practical information and tools to assess the appropriateness of microfinance in a conflict-affected community; and if relevant, to help design sustainable microfinance interventions that will help UNHCR to meet its protection objectives. The guide provides concrete tools to help design, monitor and evaluate sustainable microfinance projects, including sample templates, formats, and checklists.