Village savings boost business in Bidibidi Refugee settlement

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INNOVATION

Uganda is one of the biggest refugee-hosting nations in the world, with 1,660,524 refugees as of March 2024.

The influx of refugees is due to several factors in Uganda’s neighbouring countries, especially war and violence in South Sudan and DR Congo, and associated economic crises and political instability in the region.

However, refugees continue to have several difficulties in accessing social services, even with efforts made by the Government and development partners to guarantee their comfort.  

The refugee influx in Uganda did not only cause an increased population in the areas of settlement but also put pressure on the available resources.

When war erupted in South Sudan, Africa’s youngest nation, in 2013, countless people fled to neighbouring countries.

Many refugees lost all their possessions, making it challenging to start anew, especially in a foreign land like Uganda. However, the establishment of Village Savings and Loan Associations (VSLAs) has brought renewed hope to these displaced communities. 

Hope Mafaranga and Adam Gule look at these associations that have significantly improved the lives of refugees, helping them rebuild and find stability despite their challenging circumstances.

Early in the morning, with a smile on her face, 37-year-old Rose Bako arrives at her general merchandise shop in Village 3, Bidibidi Zone 2, ready to start another day of business.

She will spend the entire day at the shop selling goods to earn money to repay the loan she borrowed from a VSLA group in her village and save part of the money to support her family. While she is busy at the shop, Bako says her husband stays at home, helping to co-ordinate other family responsibilities and keep things in order until she returns late in the evening.

Bako, a mother of six, is one of over 200,000 South Sudanese refugees who fled to Uganda’s largest refugee settlement, Bidibidi, to escape the deadly conflict between forces loyal to President Salva Kiir and those supporting his deputy, Riek Machar.

How the business started

Upon their arrival in Uganda on November 17, 2016, Bako said life became so hard that they were entirely relying on the World Food Programme (WFP) to feed her family and other refugees.

However, in 2020, when the COVID-19 pandemic broke out, WFP announced a reduction in food rations.

Bako knew she would face difficulties in feeding her family and she had to come up with a solution by joining a communal savings group.

“To accumulate money to start a business to support my family, I had to join a savings group that would allow me take out small loans for personal and business needs. I also knew that these groups had low interest rates compared to traditional banks,” she said.

In 2021, Bako joined Emmanuel Savings for Life Group as its 17th member. Over time, the group’s membership grew to 30 dedicated individuals.  

Later that year, the group experienced a significant blessing when the Adventist Development and Relief Agency (ADRA) Uganda sought out organisations with a clear vision and mission to support through their Action for Strengthening Partnerships in Inclusion, Resilience and Education project.

ADRA-Uganda provided the group with comprehensive training in financial management, best saving practices, and business management.

This training proved invaluable for Bako, who had no steady source of income at the time. She started by saving sh2,000 per week, which she earned by selling firewood and providing casual labour within her community.

Through diligent saving and the support of her group, Bako managed to accumulate sh200,000 by the end of the first year. Remarkably, this amount grew to sh290,000 with the added interest.

Armed with the financial management skills she had learned, Bako and her husband decided to open a shop selling general merchandise.

This venture marked a significant turning point for her family, transforming their financial situation and providing a stable source of income.

Bako’s journey with the Emmanuel Savings for Life Group illustrates the profound impact of community support and education. The training from ADRA-Uganda empowered her to save effectively and invest wisely, leading to improved financial stability and resilience.

Harriet Dusman (right) with a refugee colleague working on a fabric in their shop at the refugee settlement. The two started their entrepreneurship journey through community. (All Photos by Ivan Kabuye)

Her story is a testament to the potential for personal and communal growth when given the right tools and opportunities. She invested sh200,000 into the business and used the remaining sh90,000 to lease land from the local communities to grow their own food.

Sam Businge, the co-ordinator of the ASPIRE project implemented by ADRA-Uganda and funded by the Norwegian Agency for Development Co-operation, said the project aims to empower group members by offering comprehensive support to boost their economic resilience and social cohesion.

“We have empowered the refugees through training in financial literacy, enterprise selection and business skills, and have provided savings materials to support groups in their weekly savings,” Businge said.

He added that they also monitor the activities of these groups and offer technical support to promote self-reliance.

Businge said the project is also assisting groups in establishing block farms for large-scale food production, value addition and market access. “This will enable them to increase their yields, improve product quality, and tap into lucrative markets, ultimately boosting their income and livelihoods,” he said.

Beyond economic empowerment, Businge noted that the project also focuses on peacebuilding among the groups.  

“Conflict resolution and mediation training is provided to help members manage disputes and promote harmony. This will foster a supportive and inclusive environment, allowing VSLA groups to thrive and become a positive force for change in their communities,” he said.

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Businge said by combining economic empowerment with peacebuilding, there will be a transformative impact on the lives of members and their communities,  which will enable them to break the cycle of poverty, build resilience and promote peace and stability.

Stephen Ladu, the chairperson of Zone 2’s Refugee Welfare Council 3, highlights significant improvements in families participating in savings groups.

He noted that when both men and women agree to save, it greatly facilitates family support. Ladu emphasised the need for implementing partners to transition from village savings and loan associations to larger co-operative savings and credit co-operative societies (SACCOS).

These SACCOS could offer substantial loans, exceeding sh1m, to foster better business growth among members. Solomon Osakan, a refugee desk officer for West Nile, underscored the transformative impact of VSLAs on refugee families.

He said amidst donor fatigue, these initiatives offer vital pathways for refugees to achieve independence and sustainable livelihoods. Osakan reflected on the shifting landscape where fewer project launches occur, contrasting with an increase in project closures due to donor fatigue.  

Members of a village savings and loan association counting their money before putting it back in the savings box.

Despite this challenge, he asserted that initiatives like VSLAs remain crucial for empowering refugees in their settlements.

Better life at home

Betty Dina, 28, a resident of Village 1 in Bidibidi Zone 4, shares how her life has transformed since joining a VSLA group.

Before joining, life was challenging for her family, often relying solely on aid from WFP, which was insufficient, leaving her children malnourished.

“This year, I joined the savings group because my family was struggling,” Dina said. “We used to rely on food aid, and once it ran out, we went days without eating anything,” she added.

Dina borrowed sh45,000 from the group and invested it in a small food retail business in the local market.

The income from this venture has significantly improved their situation, enabling them to afford daily meals, as well as basic necessities like clothes and medicine.

“I am now saving sh5,000 per week and using loans from the group to boost my business. Life is much better now,” she said with relief. Similarly, Joyce Hanan, 28, a mother of three, also found a new lease on life after joining the Fana Kazi VSLA group in Bidibidi Zone 4.

She borrowed sh100,000 to start a business selling tomatoes and onions, which now earns her a daily profit of sh5,000, in addition to savings for her family’s needs.

“As a single parent, this has enabled me to support my children’s education, afford medical care when they are sick and provide them with decent clothing,” Joyce said.

Both women emphasise how VSLA groups have empowered them and many others to become financially independent and improve their families’ lives.

Hanan has even expanded her ventures beyond retail, using savings to lease farmland for maize, sorghum and cassava.

Abdullah Yusuf (left), a refugee from Southern Sudan, with his colleague weeding their cassava plantation set on a piece of land that was given to them by the Office of the Prime Minister.

These stories highlight the transformative impact of VSLAs in Bidibidi, showing how access to financial resources and community support can lift families out of poverty and towards sustainable livelihoods.

This story project was done with support from the Word Association of Newspapers and News Publishers Women in News Social Impact Reporting Initiatives Grant Gender Equality, Diversity and Inclusion.

The views expressed are not those of the sponsor.