Refugees excited over extension of financial services to settlement
KIKUUBE, August 19, 2024 — Refugees in Kyangwali Refugee Settlement in Kikuube district are celebrating the recent extension of financial services to their area, a development they say will greatly ease their previous difficulties in accessing financial support.
Goretti Mugambirwe, Chairperson of Block One in Kyabitaka village, expressed relief over the launch of UGAFODE Microfinance Limited’s new Sales and Customer Service Centre in Kasomga village, Kyangwali Sub-county. Mugambirwe, a refugee from the Democratic Republic of Congo who has lived in Kyangwali Refugee Settlement for 28 years, explained that obtaining loans to support businesses had been a significant challenge.
He said most financial institutions were not offer loans to refugees, forcing many to turn to money lenders who charge high interest rates and demand frequent repayments, often on a daily or weekly basis.
Simon Nzombo, a maize and bean producer from Kyebitka village, also praised the government’s decision to allow financial institutions like UGAFODE Microfinance Limited to operate in Uganda.
Nzombo recalled past attempts to persuade Bank of Uganda [BoU] officials to create policies enabling refugees to access loans but was informed that such policies were not possible at the time.
He noted that refugees often resorted to forging National IDs to secure loans, a practice that is both illegal and risky. Nzombo welcomed UGAFODE’s new presence in the settlement as a significant opportunity for both refugees and the host community.
Oket Ora Juma, a South Sudanese refugee who has been in the settlement for 24 years, cited the lack of financial support from commercial banks during his time in the camp. He lauded government for allowing UGAFODE to operate in the settlement area, which he believes will make a substantial difference in the lives of refugees.
Speaking at the launch of the new Sales and Customer Service Centre days ago, Shafi Nambobo, CEO of UGAFODE Microfinance Limited, emphasised that the initiative aims to promote financial inclusion among refugees. Since its inception in 2018, UGAFODE has opened three customer service outlets targeting refugees.
Nambobo shared that the financial inclusion for refugees [FIR] programme has disbursed Shs 9.4 billion to 2,387 refugee customers from various nationalities and opened 6,560 savings accounts.
He added: “UGAFODE provides financial literacy training to refugees, supported by partners such as the Wakati Foundation, Nsamizi, and AMFIU [Association of Microfinance Institutions of Uganda]. This training helps refugees understand the difference between loans and grants and develops their business skills.”
The new UGAFODE centre will offer services to both refugees and the host communities in Kasomga, Kyebitaka, Kemitoma, Kegoma, Rwenyawawa, and Kitara villages. Loans will start from as low as Shs 100,000, with agricultural loans available through aBi financing. Nambobo urged customers to embrace these loans to engage in commercial farming.
Ivan Amagaragariho, Director of Internal Audit at BoU, lauded UGAFODE for extending financial services to low-income entrepreneurs and small business owners in Uganda. He expressed optimism that the new centre in Kyangwali will enhance financial inclusion, stimulate economic activity, and support sustainable growth.
On her part, Mona Mugume Ssebiliba, Executive Director of aBi Finance, praised UGAFODE’s commitment to transforming the lives of marginalised communities, including refugees, host communities, women, and youth.
She cited UGAFODE’s achievements, including its pioneering role in refugee financial inclusion and significant contributions to agribusiness financing and socially responsible investments.
With a strong track record of extending affordable loans , and substantial coverage of small-scale farmers, UGAFODE’s expansion is seen as a transformative development for the financial landscape of Uganda’s refugee settlements.
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