Fifty-two years after the first World Roma Congress on 8 April 1971, the urgency for inclusion and empowerment of Roma has never been greater.

Roma refugees from Ukraine fill in documents for visas and social financial benefits. Photo credit: Shutterstock

Afflicted by multiple recent crises, the living conditions for most of the Roma across Europe have only worsened for the past two years. Roma continue to face increasing levels of discrimination and prejudice – many Roma fleeing the war in Ukraine are still refused entry and safe shelter in the neighbouring countries.

Exclusion from financial services has been particularly hindering to economic advancement of Roma people, thus posing a particular challenge to their inclusion. Many face cumulative barriers in accessing a loan such as lack of an employment history, bankable collateral, indebtedness, lack of financial literacy and digital skills, including direct or indirect discrimination. In addition, many Roma live in remote or rural areas, with no access to branches of financial service companies or even ATMs. For banks and other financial intermediaries, Roma individuals with low means do not represent an attractive target market, as they are perceived riskier by banks, even though they might have the same risk profile as anyone else. Without access to conventional financial services, many Roma families take out cash loans from private money-lending companies, shopkeepers and other wealthier families in their neighbourhood and then quickly become indebted due to excessive interest rates, which push them deeper into poverty.

According to a 2021 survey conducted by the EU Agency for Fundamental Rights (FRA), more than half of Roma households (52 per cent) experience housing deprivation and 82 per cent of Roma lived in overcrowded households. The Council of Europe Development Bank (CEB) has been implementing an EU-funded pilot project, Housing and Empowerment for Roma (HERO), which aims to reduce the socio-economic exclusion of Roma in Bulgaria, Romania and the Slovak Republic, by strengthening their financial and technical capacities to improve their housing conditions through access to financial services. The project aims to address the gaps in previous housing initiatives by taking an integrated approach, facilitating access to targeted saving schemes, financial literacy training, employment assistance as well as provision of bespoke micro-loans tailored to the financial needs of the Roma households. A strong focus of the project is advancement of community-led development through implementation of innovative solutions to improve living conditions and promote social cohesion.

Bringing together stakeholders representing different sectors and institutional values (public authorities, banks, and NGOs) has been challenging and most of the project partners are working together for the first time to deliver the challenging goals of providing micro-finance, housing and employment activities to vulnerable Roma communities. Social issues faced by vulnerable communities are complex and multifaceted which no organization can address on their own. Cross-sector collaboration enables HERO implementing partners to combine different resources, thinking and approaches to amplify their impact.

The experience so far has shown that NGOs have a unique role in making such initiatives a success, by acting as catalyzers and taking a leading role in forging cross-sector collaboration. A significant barrier preventing greater bank involvement in financial inclusion efforts is that banks and other financial intermediaries have little capacity to do the fieldwork necessary to develop programs in Roma communities. Partnerships with NGOs can bridge this gap as NGO staff with deep connections to the Roma community are well positioned to act as intermediaries between banks and communities, such as in assisting Roma families to open bank accounts and in providing basic financial education.

Philanthropy can be an advocate for financial inclusion

Governments, national banks, and philanthropic institutions have an important role in facilitating collaboration between private sector and civil society by creating and supporting a platform for engagement on financial inclusion. In addition, pilot development initiatives usually require substantial fine-tuning to adapt to evolving conditions on the ground. Philanthropy can be an advocate for financial inclusion and philanthropy organizations can provide the so much-needed flexible funding that other international organizations cannot provide.

States have to ensure that banks and other financial intermediaries make concrete efforts to provide better access to Roma to banking and financial services. Similarly, national authorities can establish guaranteed funds to incentivize banks and other financial intermediaries to extend micro-loans to Roma or develop loans that are appropriate to their financial profile.

Access to financial services will not solve the structural and systemic discrimination that Roma have been facing for centuries. However, there cannot be social inclusion without economic advancement of Roma and this should start from full access to financial services.

Daniela Aydin is a Project Officer at the Council of Europe Development Bank and the HERO Project Manager.

Opinions expressed are solely the author’s and do not reflect the opinions and beliefs of the Council of Europe Development Bank or of the EU institutions.