FSD Uganda Launches Project to Scale Up Access to Finance for Refugees

FSD Uganda's Juliet Tumuzoire (2nd R) and other partners at a news conference.

Financial Sector Deepening (FSD) Uganda and partners have launched a project that seeks to scale up access to financial services for refugees in Uganda.

The Financial Inclusion for Refugees (FI4R) project was launched Tuesday in Kampala.

Juliet Tumuzoire, the Head of Financial Services at FSDU said the project is targeting 5 refugee settlements including Nakivale, Bidibidi and Palorinya. 

“The households are 250,000. We target to see that for the next two years, we should have 150,000 to 200,000 users that are introduced to the financial services sector,” she said at a news conference in Kampala. 

The FI4R project is co-funded by FSD Uganda and Financial Sector Deepening (FSD) Africa – in collaboration with BFA Global.

It includes a ground-breaking study that will track the financial lives of refugees in Uganda for 12 months. 

The study will inform the development of financial products and services offered to refugees and their host communities by three implementing partners – Rural Finance Initiative, Vision Fund Uganda and Equity Bank Uganda Ltd. – as well as other market actors.

Partners will come up with innovative projects which will create efficiency in humanitarian payments and provide relevant formal financial services to refugee settlements in the West Nile region and Isingiro district. 

These market-led interventions are expected to enable better integration, strengthen the resilience of households by stimulating economic activity and increase take-home incomes. 

Quoting a 2018 Finscope report, Tumuzoire said only 78% of Uganda’s population was found to be financially included while only 13% of the refugees in Bidibidi settlement had access to financial services which still weren’t through formal service providers.

She said Equity Bank, Vision Fund and RUFI will develop products and be able to understand the lifestyle of the refugees so that the products are created are specific to them.

At least 78% of refugees depend on non-employment incomes, 52% on self employment revenues, 27% on casual employment, 25% on remittances, 21% on agricultural incomes and 6% on regular employment incomes.

Anthony Kituuka, the Executive Director of Equity Bank Uganda said the bank has engaged with refugees in Kenya and Uganda to ensure they have the best potential livelihood so they can get out of their situation.

“For this to happen, they have to receive some incentives. Historically, their have been receiving food items. But the current shift is towards cash-based interventions,” he said. 

He said agency banking has been a key enabler in easing access in the various refugee settlements.

Refugees have received VISA cards through which they can access cash from the agents that operate in these settlements, Kituuka said.

“What we have seen in the past two years, we have witnessed savings. We are seeing an increase from an initial 4% saving up to 19% saved every month. Over 15,000 payments every month to 50,000 household which means we are impacting about 100,000 refugees”.

The amounts being paid to these people is about Shs 3bn every month.

Martina Crailsheim, the Program Manager for Refugee Microfinance at Vision Fund said said their program has been working to deepen financial inclusion for refugees in West Nile.

She said that for a long time, financial services have avoided the West Nile region due to its remote location, high illiteracy, low financial capacity.

“We are trying through digitization and mobile money to develop products that reach those in need including refugees. We rely on partners to form savings groups”. 

She reported tremendous progress in the implementation of the project, with at least 2,600 people (refugees and host communities) served so far.

Yengi Lokule is the Chief Executive of Rural Finance Initiative (RUFI) which started from Sudan in 2008 and has been operating in Uganda for the last three years working in Adjumani, Koboko and Obongi districts.

RUFI through its ‘Smile for Refugees’ project is offering finance lending to refugees. Working with Centenary Bank has been providing loans and savings to refugees in West Nile.

“Security is very porous. They collect savings but they don’t have anywhere to save them. We saw this as an opportunity to bank them. We see a high opportunity to lend especially to the women and youths,” Lokule said.

Uganda hosts about 1.3 million refugees, making it the third biggest refugee hosting country world over. Development partners believe that initiatives that seek to improve the incomes of these refugees can reduce reliance on aid and make them self-sustainable.

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