Financial Capability and Asset Building Among Refugees in the United States: Qualitative Evidence from Refugees Resettled in a Northeastern City

Background and purpose: Financial capability is essential for economic security and upward economic mobility. Two components of financial capability­—access to beneficial financial services and ability to manage one's finances prudently—are prerequisites in successful asset building for long-term economic security and development. Despite the increasing number of empirical studies on financial capability and asset building (FCAB) in general, few investigated refugees’ financial experience in the U.S. Expanding our understanding of refugees’ experience of financial capability and asset building will facilitate the development and implementation of FCAB policies and programs for the vulnerable population.

Methods: This study employed a qualitative research method using interview data with 26 refugees resettled in a Northeastern city in the United States. Semi-structured in-depth interviews were used to collect data from study participants to learn about their economic experience, including labor and financial markets. Data collected either in person or via Zoom. Interviews were conducted in Arabic, Burmese, English, or Swahili. Thematic analysis was used to identify themes and patterns emerging from interview data.

Results: In-depth interview data analyses show that there exist both barriers to and facilitators of refugees’ financial capability and asset building in the United States. First, refugees rarely received training or information on the US society in general and US financial system in particular before coming to the U.S. Lack of knowledge on financial systems is a barrier to efficient financial management (“When you were just arrived, you don’t realize you can go to your account and you can cash a check for free, if you [have a] bank account. But it took time when you're just refugees to realize that...”) and placed them vulnerable to financial exploitation (e.g., an extremely high interest rate for an auto loan). Second, refugees came with debts from the International Office for Migration (IOM) to cover their travel costs to the U.S. Some refugees had a hard time in paying IOM loans, which sometimes ruined their credit. Third, refugees obtained access to financial services with assistance from informal social networks (e.g., friends’ assistance with opening bank accounts) and formal institutions (e.g., home-purchase workshops at a bank and business loans from a non-profit organization). Fourth, some refugees feel a sense of accomplishment after getting access to basic financial services, suggesting that financial access has symbolic and emotional values as well as economic ones (“I wanted to hold the bank card... My husband has a bank card. He has a credit card. [He said], “I made a bank card! I made a bank card!”).

Conclusions and implications: This study’s findings call for the removal of structural barriers to refugees’ FCAB within social work practice. Examples include provision of systemic and practical pre-resettlement programs (workshop, orientation, or coaching) that prepare refugees for lives in the United States and reform of the IOM loan system. Analysis results also show the need for mobilizing resources both from formal institutions and informal social networks to enhance refugees’ FCAB.