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Refugee communities in Uganda still prefer using cash despite increase mobile phone ownership, report


There is increased use of cash at home as refugees seek easy access to money in case of emergencies, despite the growth of phone ownership which supports mobile money transactions. This is according to a new study by FSD Africa, FSD Uganda, and BFA Global released yesterday.

The study reveals that refugees found the use of cash convenient in responding to emergencies, especially those that are health-related.

The study which sought to examine the financial strategies employed by refugees attributed increased phone ownership to the 2019 legislative changes which allowed refugees to access SIM cards in their names. Ownership of smartphones is 9% higher among female refugees compared to men.

Dubbed, Rebuilding Livelihoods in Displacement, the report further revealed that while refugees have a wide range of income sources, self-employment remains one of the primary sources of income. However, proceeds from agriculture are on the rise with more people paying attention to the sector because of reduced food rations.

The report communicated an urgent need to improve access to formal financial services.  Access to banking agents was found to be low which limited the use of formal financial services. Most agents are stationed at the administrative center which is far from some of the refugees.

With about 30 million refugees on the continent, the findings could provide insights for other refugee populations outside of Uganda.

The project partners (FSD Africa, FSD Uganda, and BFA Global) are recommending the development and refinement of financial products to cater to the needs of refugees. These could include branchless banking to make financial services more accessible and microinsurance for medical emergencies. Additionally, the partners recommend renewable energy solutions for lighting and cooking, and upskilling for economic self-sufficiency.

Between 2019 and 2021, the researchers worked with refugees to detail their income and expenditure patterns and their coping strategies for financial shocks. Insights gathered from this research is expected to guide the project partners, beyond the life of the intervention, on the development of products and services offered to refugees. They will additionally be used to demonstrate the economic viability of the refugees while deepening and broadening access to and usage of financial services among refugee and host communities in Uganda.

‘’The two-year FI4R intervention has validated the effectiveness of key business approaches such as agency banking and digitized VSLAs in addressing the identity, distribution, and marketing challenges faced by financial service providers who wish to serve forcibly displaced community. We expect this seminal project to facilitate a coordinated entry of more actors into this space over the next few years.’’  David Darkwa, Manager, Competitive Strategies, FSD Uganda, said

Douglas Asiimwe Commissioner for Refugees in the Office of the Prime Minister in Uganda, while commenting on the report said the data created by the Financial Inclusion for Refugees (FI4R) initiative is critical for planning and delivering aid, creating insights about the demand for products and services from marginalized groups, and identifying new markets that the private sector, including financial service providers, can innovate for. ‘’The OPM is confident that the outcomes from FI4R serve as a call to action for both humanitarian actors and the financial sector community to explore ways to serve this population in a responsible and sustainable way”  he said.

“I am proud to note the efforts of various partners who are introducing customized products and adding extra features to existing products to formalise financial systems in the refugee settlements. Through enhanced collaborations, I do not doubt that these will scale to impact more populations in these areas.”  Kuria Wanjau, Manager, Forcibly Displaced People, FSD Africa, said.

Michelle Hassan, Principal Consultant and Kenya Country Manager, BFA Global, said noted that the research on refugees’ financial lives and their uptake of different financial products has proven they are a viable and bankable segment. ‘’We look forward to seeing stakeholders in the financial and humanitarian ecosystem applying the insights provided to help displaced communities rebuild their lives.’’

The full report is available here.

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