Confronting the Hurdles: How Banking Access Challenges are Disrupting Humanitarian Work

Ongoing Challenges

The financial access issues facing the NGO sector are certainly not new, and increasingly there is pressure mounting on policymakers, regulators, and the banks to ensure that the NGO sector is protected from financial hostility. The motivation for banks to de-risk their clients largely stem from their decreased risk appetites in response to stricter anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. Falling foul of these banking practices more than any other sector is the NGO sector, and furthermore Muslim charities are bearing the brunt of it – leading to significant barriers and delays to their operations abroad.

A steady increase in the amount of action taken by banks against organisations within the charity sector, and especially Muslim organisations, presents major hindrances to international peacebuilding, development, and relief efforts. Charity bank accounts being frozen or shut down entirely means that vital aid is blocked from reaching vulnerable beneficiaries.

MCF in collaboration with Conciliation Resources and Bond delivered an event titled “Confronting the Hurdles” that brought key stakeholders and representatives from various sectors together to discuss issues of financial access and de-risking on the 14^th of June 2022. Attendants to the ‘hybrid’ style event saw 50-60 individuals from various sectors, such as banking, charity regulation, from the FCDO, and most importantly a range of charity practitioners – the majority of whom were from the Muslim charity sector.

Breaking Down Barriers

Dr. Teresa Dumasy, Director of Research, Advisory and Policy at Conciliation Resources has worked for over a decade on these issues. She opened the event with an address where she emphasised that financial de-risking has a deep impact on the efficiency of international charities and that there ought to be more of a public awareness of the issue, and that collaborative efforts such as this event would be an impetus to develop change on this front.

The disproportional effect of financial access challenges on Muslim-led and small charities deserves a thorough overview, and as Fadi Itani CEO of MCF highlighted in his opening statement, the financial landscape for charities is becoming increasingly difficult to navigate, and where risks may be present, they ought to be properly and holistically addressed rather than sweepingly avoided.

Walid Safour of Al-Amal Foundation and formerly of Human Care Syria powerfully conveyed his incredulity at having learnt that his own personal bank account, and that of his spouse, alongside the personal accounts of his fellow trustees at the Syria focused INGO were all blocked by banks they had developed decades worth of relations with – with no clear reasoning given.

The case studies of Muslim-led organisations, delivered by practitioners, were paramount to the success of the event. Centring their experiences, accounts that were being heard for the first time by many of the attendees of the event, allowed for a wide range of audiences to understand from the perspective of those most affected by de-risking and other financial access issues exactly what happens during the process, and what the ramifications are thereafter.

Looking Forward

Due to the event being held a day prior to the annual Tri-Sector Working Group (TSWG) meeting, the final session was particularly important. Presented as a mock-TSWG in miniature, the final session allowed for a dialogue between the FCDO, the Centre for Strategic and International Studies, Muslim charity practitioners, and the US based Charity and Security Network who discussed the work of the global non-profit organisation on Financial Action Task Force (FATF) standards.

Steve Harvey from Fintech for International Development (F4ID) provided attendees with a break from some of the doom and gloom by sharing his organisation’s successful launch of their QR code product to provide international humanitarian assistance, assuring end to end security and that the right person is getting the aid that they need. The product was launched in Afghanistan the morning of the event, and garnered interest from the charity practitioners who wished to explore the avenues of innovation available to them in the aid sector.

Watch our video from the event:

An in-depth study and look into financial access issues and de-risking can be found in MCF’s recently published 4^th edition of “The Forum” – the journal of the Muslim charity sector. Dr. Teresa Dumasy’s article in the publication (pages 20-21) explores the impact of this financial action on Muslim organisations in particular, see: https://www.muslimcharitiesforum.org.uk/wp-content/uploads/2022/06/The_Forum_2022_WEB_VERSION.pdf