The ILO and the Association of Ethiopian Microfinance Institutions’ partnership strengthened financial inclusion and resilience for refugees and host communities through integrated financial education and microinsurance initiatives.

The Association of Ethiopian Microfinance Institutions (AEMFI), established in 1999, is a non-profit, non-governmental body promoting microfinance in Ethiopia. With a network of 52 member MFIs, the AEMFI provides a platform for knowledge exchange, advocacy, capacity-building and performance monitoring, all of which focus on delivering financial services to vulnerable communities, including refugees and host communities.

In 2021, the AEMFI and several of its member MFIs participated in the ILO training Making Finance Work for Refugees, Displaced and Host Communities. This capacity-building programme was designed to equip financial institutions with tools to serve forcibly displaced populations. The training focused on adapting financial services to the unique needs of refugees and host communities and explored strategies to address financial inclusion challenges in underserved areas. Through practical guidance and the ILO’s inclusive methodologies, the AEMFI members gained essential skills to support refugee financial inclusion, highlighting a commitment to socio-economic integration.

In parallel, the AEMFI also championed the institutionalization of financial education within its network. Through the ILO’s Financial Education Programme, member MFIs have implemented comprehensive financial literacy initiatives that help individuals and families understand essential concepts in savings, budgeting and debt management. The AEMFI has played a central role in expanding financial education through training trainers in the ILO’s FE programme, enabling the development of a robust network of national and regional trainers. By leveraging the ILO’s structured training materials, which cover core financial literacy principles and adaptive strategies for refugees and host communities, the AEMFI ensures that trainers are well-equipped to educate diverse client groups in managing their finances sustainably.

Additionally, the AEMFI and the ILO, recognizing the need for risk mitigation and financial security, collaborated to introduce microinsurance as a valuable addition to MFI service portfolios. This initiative aligned with recent regulatory changes introduced by the National Bank of Ethiopia, under which MFIs are mandated to offer microinsurance to safeguard movable assets, often pledged as collateral. Microinsurance, which is especially critical in high-risk sectors like agriculture, addresses both borrower vulnerability and lender risk.

In December 2024, the ILO and the AEMFI delivered  intensive microinsurance training for Ethiopian MFI managers and independent trainers, covering the diversification of financial products, client-centric product development and best practices in risk management. This workshop, informed by the local context and international case studies, equipped participants with the knowledge to design and implement effective microinsurance solutions. By incorporating microinsurance, MFIs can better serve rural and underserved communities, enhancing the resilience of both FSPs and their clients.

This partnership between the ILO and the AEMFI exemplifies a sustainable model for the financial inclusion of refugees and host communities in Ethiopia, embedding financial education and microinsurance within the strategic framework of MFIs. The collaboration strengthens both the institutional capacity of Ethiopian MFIs to support refugee and host communities through inclusive financial services and the financial resilience of the communities they serve, promoting long-term socio-economic stability.