One of the multiple ordeals faced by the estimated 281 million international migrants and more than 59 million internally displaced persons involves their finances—or, more specifically their lack of access to the financial system of their new countries. But those many roadblocks to financial inclusion also pose a promising opportunity for fintech startups seeking to ameliorate the situation, according to a new report from Village Capital.

Called Catalyzing Financial Inclusion: Gender-Inclusive Fintech Solutions for Migrants, the report is based on more than 70 interviews with entrepreneurs, NGOs, financial institutions, investors and others. The focus is on financial services in Sub-Saharan Africa, the Middle East and North Africa and South and Southeast Asia.

“The current financial system in many countries doesn’t meet the needs of migrants,” says Alicia Sornson, regional lead for MENA at Village Capital.

The report recommends that investors, grant-makers and others provide catalytic capital to support local solutions to systemic financial inclusion problems.

Multiple Roadblocks

The report lays out numerous finance and fintech-related challenges faced by migrants and asylum seekers, such as:

Legislative constraints. In some countries, outdated or weak legislation hinders migrants’ ability to access formal financial services with a bank account. But having a bank account is the foundation to financial inclusion, since it allows for access to loans, insurance and other financial services. A lack of cross-border jurisdiction also stymies the portability of such critical products and services as credit scores and pension plans.

Lack of digital access. While migrant workers usually own a mobile phone, less than two-thirds of refugee households do, according to the report. That lack of digital access hinders their ability to tap fintech-based services. And, because women are less likely to have a bank account, own a mobile phone or be digitally literate than their male counterparts, they’re particularly hindered in their ability to join the formal financial system, save money and grow wealth.

Language and literacy barriers. A lack of financial and digital literacy among migrants poses a significant challenge to migrants’ financial inclusion. That’s especially true for more sophisticated financial products such as lending or insurance. Low levels of literacy is the second largest barrier to internet use by refugees, according to study by UNHCR cited in the report.

Lack of trust. Often the targets of predatory behaviors, migrants typically are distrustful of any financial service provider. For that reason, they usually favor community savings groups and other informal alternatives. That distrust can be compounded when they encounter systems using unfamiliar technologies.

Identity requirements and documentation. Many countries require strict Know-Your-Customer processes to avoid money laundering or financing of terrorist groups. That can mean anything from requiring a permanent address to legal documentation that many migrants can’t provide.

Entrepreneurial Response

The report also examines the ways entrepreneurs are starting to address these roadblocks. One area with a particularly large number of fintech startups is creating digital verification products, according to Sornson. “They help you certify you are who you say you are and ensure compliance with regulations,” she says. For example, Uqud, based in the UAE, does cognitive data analysis and AI document scanning to enable the creation of digital identities. That means it helps with translating, reading and verifying digital documents in different languages, allows migrants to use paperwork from their home countries.

Tunisia-based Kaoun, verifies that individuals are real humans via live video selfies that they upload. It’s aimed especially at people in remote areas who might not have access to a banking branch.

Another big sector where there’s been an increase in startups is in remittances, according to Sornson. HubPay in the UAE has a digital wallet that aims to lower the cost of remittances, while creating a digital wallet for users that fosters financial inclusion. “A lot of families rely on remittances sent by family members abroad,” she says. “And women disproportionately rely on them.”

Sornson also points to opportunities in other areas, as well—for example, in microfinance and loans, insurance and pensions. “We’re seeing a lot of technology pop up to help people get access to those products like pensions and insurance in their local countries,” says Sornson. Other areas of focus include digital and financial literacy, employment tech, platforms to help farmers get access to markets and digital forms of saving circles, or tontines as they’re called in many countries.

Stumbling Blocks for Entrepreneurs

Of course, entrepreneurs face their own share of challenges. For example, in some cases, they need to meet users where they are and design products that fit their capabilities and current status, according to Sornson. Instead of, say, requiring rigid onboarding, registration and compliance processes, a better approach would be devising alternative credit scoring mechanisms. “Through open and unified APIs, fintechs can track and gather users’ financial activities collected from different sources, and use this data to build financial profiles for unbanked users,” she says.