REFUGEES | AID ITEMS | CASH

A new report shows an increase in the use of cash at home as refugees seek easy access to money in case of emergencies. 

According to the study released last week, 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. 

The report titled ‘Rebuilding Livelihoods and Displacement,’ 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 joint report from FSD Africa, FSD Uganda and BFA Global called for 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 now 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, 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. 

Commenting on the report, Douglas Asiimwe - Commissioner for Refugees in the Office of the Prime Minister in Uganda, said that data created by the Financial Inclusion for Refugees (FI4R) initiative is critical for planning and delivering aid. 

By 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. 

He added that 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 responsibly and sustainably. 

David Darkwa, Manager, Competitive Strategies, FSD Uganda, added that 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,” said Darkwa. 

 Kuria Wanjau, Manager, Forcibly Displaced People, FSD added that through enhanced collaborations, report findings will help scale the impact on more populations in other areas. 

 “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,” said Wanjau. 

Michelle Hassan, Principal Consultant and Kenya Country Manager, BFA Global, adds that their 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.,” he added.