UGAFODE Microfinance Limited (MDI) rolled out the financial inclusion for refugees project with a pilot on the urban refugees after receiving authorization from Bank of Uganda. Starting with the urban refugees provided a platform for using our already existing structures to serve this particular segment of customers. The pilot was used to identify and work on all the gaps that come with serving this particular segment.
Having understood the dynamics of serving Refugees through our pilot with the urban settling we were ready to roll the project and the best way to do this was by meeting them in their community. Following a feasibility study and the experience attained from the Urban pilot we decided to begin rolling out in the refugee camps starting with Nakivale. Nakivale refugee camp has over 100,000 refugees and is the 8th largest refugee camp in the world covering 185km2 which offered us a vast area for roll out.
Through funding from SIDA and Grameen Credit Agricole, Nakivale branch found in the refugee settlement was finally opened. This was to take financial services closer to the people in order to serve them better within the comfort of their settlement. Nakivale branch opened just at the blink of the Covid 19 pandemic lockdown that took a toll on the financial situation of the country.
Nakivale branch found at the heart of the settlement has proven to serve both refugee and Ugandan customers while holding a track record for a high quality portfolio. It has also set the trend for other financial service providers that have picked interest in the refugee segment.
This branch serves 2749 customers of which 556 have so far taken loans with a portfolio of about UGX1.9 billion. The branch attributes most of its success to the various Stakeholders that have provided both monetary and technical support. With this opportunity the branch has been able to get over most of the challenges that were anticipated while serving this fragile segment. These partnerships like with Office of the Prime Minister have offered legal guidance in dealing with the refugee segment hence breaking down the anticipated obstacles.
Guidance from Bank of Uganda has been instrumental in steering this new segment to the much needed compliance levels that are required. By providing approval for the opening of this one of a kind branch it was accepting the position to steward it just like other branches. This has been done by streamlining KYC for Refugees as well as providing guidelines on how to serve them without infringing on them.
Owing to the fact that we offer financially inclusive services there was no need to design special products for this particular segment as they could easily use what was available. We had only to perfect our policies and make them refugee ready so as to serve them as smoothly as is possible.
During this one year of implementation we have been able to dismiss the misconceptions that the refugees are a highly risk population that cannot repay their loans as well as the nationals. Nakivale branch statistics have proven that refugees are in reality more credit worth than nationals as PAR stands at 0.0% 30 days which isn’t the case with other mainstream branches.
Through our financial literacy sessions many refugees in the settlement have been equipped with the basic skills to make financially sound decisions. This has been key in driving them into decisions to open savings account and apply for loans as they can earnestly pay.