Ongoing “Diaries” questionnaires
Open or close financial instruments as needed
Record changes in income sources
Change household roster as individuals leave and join
Record acquisition, loss, or sale of physical assets
Record major household events (ex: death, birth, wedding, etc.)
On-going questionnaires with supplements (shown on circle edge) as needed; automatically updates diary questionnaire
Project background
The Financial Inclusion for Refugees Project (FI4R) project was launched in 2019 by FSD Uganda and FSD Africa to support financial service providers (FSPs) to offer financial services to refugees and host communities.
The project is supporting three financial service providers (FSPs) Equity Bank Uganda Limited (EBUL), Vision Fund Uganda (VFU) and Rural Finance Initiative (RUFI) to offer financial services to refugees and host communities.
As the learning partner, BFA Global is conducting refugee financial diaries in Uganda to provide insights into the financial strategies employed by refugees over time to build their livelihoods and
manage their finances. The research covers refugees in Bidi Bidi, Palorinya and Nakivale refugee settlements.
The insights from this study aim to build the evidence base for financial service providers, humanitarian agencies and telcos to understand the financial lives of refugees in Uganda and to inform
stakeholders of the opportunities available in serving refugees across different contexts.
Project background
The Financial Inclusion for Refugees Project (FI4R) project was launched in 2019 by FSD Uganda and FSD Africa to support financial service providers (FSPs) to offer financial services to refugees and host communities.
The project is supporting three financial service providers (FSPs) Equity Bank Uganda Limited (EBUL), Vision Fund Uganda (VFU) and Rural Finance Initiative (RUFI) to offer financial services to refugees and host communities.
As the learning partner, BFA Global is conducting refugee financial diaries in Uganda to provide insights into the financial strategies employed by refugees over time to build their livelihoods and
manage their finances. The research covers refugees in Bidi Bidi, Palorinya and Nakivale refugee settlements.
The insights from this study aim to build the evidence base for financial service providers, humanitarian agencies and telcos to understand the financial lives of refugees in Uganda and to inform
stakeholders of the opportunities available in serving refugees across different contexts.
Innovation is key to increasing insurance penetration in Africa. Despite recent improvements, insurance penetration across sub-Saharan African (SSA) markets remains low, at 2.78%, compared with the global average of 7.3% (Signe, 2021). Innovation is needed to change this picture: to enhance the value proposition of insurance, a new take is required on systems, product design, distribution and claims. Yet, while there is no lack of innovation on the continent[1], foundational challenges relating to, among others, infrastructure, partnerships, skills, payment streams, seed funding and behavioural barriers to adoption continue to inhibit the achievement of the required scale of innovation (Cenfri, 2021).
Need to balance risks with the rewards of innovation. While not all aspects of the enabling environment are within the regulator’s control, more and more regulatory authorities have an implicit or explicit market development mandate under which they actively work to promote innovation (A2ii, 2020). With innovation also comes risks. The reality of these risks implies that, for a market to benefit from the rewards of innovation, insurance regulators need to strike a balance between fostering an enabling environment for innovations to thrive, while also protecting the market against any undue risks that may be associated with market development. Indeed, proactive and proportionate management of the risks arising from innovation is core to maintaining the sustainability of innovation. Striking this balance aligns with the principle of proportionality in the face of digital innovation as put forth by the IAIS[2]. To maintain a conducive but safe environment for innovations to thrive, supervisory responses need to evolve and adapt to the changing realities of innovative industries.
[1] For example, as shown by Cenfri’s insurtech tracker database.
[2] The use of digital technology in inclusive insurance, IAIS (2018).
Together with FSD Uganda, we have been supporting the Financial Inclusion for Refugees (FI4R) project where 3 financial service providers (FSPs) have been offering financial products to refugees and host communities in West Nile and South-West regions. The implementing partners – Equity Bank Uganda Limited, VisionFund Uganda, and Rural Finance Initiative – started off activities in these areas in September 2019.
In January 2020, the project engaged BFA Global to undertake a baseline study that provided an in-depth analysis of the incomes, expenses, and financial management of refugees in Uganda, compared their status then, with their lives prior to leaving their countries of origin and their journeys to Uganda. This was followed by four rounds of financial diaries over two years using BFA Global’s financial diaries methodology.
The results from each round are below.
The financial diaries involved tracking incomes and spending habits of 41 households recruited from the three implementing partners. During each round, qualitative interviews were also conducted with the households. In November 2021, an end-line study was conducted to understand the evolved financial behaviour of refugees, get feedback on financial products offered by the implementing partners and assess how new financial products were used by the refugees. The Covid-19 pandemic occurred during the study period and offered the opportunity to track how households coped with the situation. Below is a timeline of the research activities undertaken dung the project.
The end-line report dubbed, Rebuilding Livelihoods in Displacement has shown 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. According to the study, 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 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 found access to banking agents to be low which limited the use of formal financial services. Most agents are found at the centre of the settlements which is far from some of the refugees.
The report recommends 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. The report recommends the provision of renewable energy solutions for lighting and cooking and upskilling for economic self-sufficiency.
With about 30 million refugees on the continent, the findings could provide insights for other refugee populations outside of Uganda.
We have launched a landmark study in Uganda with the aim of understanding the different sources of income for refugees in collaboration with FSD Uganda and BFA Global. This study aims to uncover the uses of their finances and the financial products and services they use and supporting the development of financial products and services offered by Equity Bank Uganda Limited (EBUL), Vision Fund Uganda (VFU) and Rural Finance Initiative (RUFI) and evaluating the impact of those products and services on refugee livelihoods.
Uganda is host to over 1.1 million refugees, most of whom are new arrivals from July 2016 as a result of instability in South Sudan. Uganda also has a progressive policy towards refugees allowing them to freely move, work, go to school and access healthcare. The refugee population also forms part of the country’s National Development Plan. According to 2018 figures from UNHCR and Office of the Prime Minister (OPM), refugees are economically active. A total of 45% are engaged in entrepreneurship or formal employment, 24% in farming, 15% receive remittances, and 6% receive assistance from UNHCR/WFP. Despite this, financial inclusion remains a challenge for the refugee population, with few financial service providers (FSPs) aware of or interested, preferring to focus on more traditional banking clients. As a result, most refugees are only able to access financial services through informal savings groups, SACCO linkage banking and mobile money. The limited new FSP activity that does exist tends to focus on mobile-enabled cash transfer services.
FSD Africa in partnership with East Africa Venture Capital Association (EAVCA), Intellecap and FMO have published the findings of their sector study on the investment opportunities in FinTechs within East Africa.
The report’s core explores the funding options currently available for the sector: ranging from debt offering, grants and equity provision. With the increased success of FinTech players in East Africa, investors are keen to understand the opportunities available for capital deployment in East Africa’s FinTech space. The report assesses the financing options currently available in the market for target investors. It also explores the risks associated with the sector and how other investors deal with such risks. Finally, the report has explored returns available for FinTech investors in East Africa, to provide guidance on the region’s earnings potential.
Some highlights from the report:
The objective of the report is to assess whether the appropriate application of ‘new’ technologies could be leveraged by donors and other development agencies to increase formal remittance flows into Africa and/or reduce the cost of sending money home.
Fragile and conflict-affected states (FCAS) are of particular interest given the importance of remittances to livelihoods and post-conflict development, as well as the exacerbated challenges that are often faced in these jurisdictions.
Market facilitation (M4P) is an approach to promote systemic change—change that goes beyond individual players and that is relevant to the wider environment, affecting many. Market systems development requires that organisations play a facilitating role. Standing outside of the market system, facilitators work with different players within the system, to make it work more effectively. Their essential role is active and catalytic, to enable others to do rather than do themselves—stimulating changes in a market system without becoming part of it.
Understanding this concept and applying it in market systems development initiatives is no mean feat. Market facilitators, donors and practitioners must draw from a wide range of tools and techniques to put market facilitation into practice. Developing and maintaining partnerships, managing risks, deploying flexible intervention tactics, establishing a measurement system and communicating effectively are all useful learning points for those working in this field. Knowing when to exit an intervention is just as critical as identifying and selecting the right partners to work with and understanding these complexities can have an impact on the effectiveness of interventions. Market facilitation as a practice is more of an art than a science, directed by principles rather than lists of actions, which can make it difficult to translate the theory into practice.
There is limited evidence from the field on how to apply this approach in a way that ensures interventions are both scalable and sustainable. In June 2015, FSD Africa commissioned the Springfield Centre to produce: a) one
comprehensive case study of FSD Kenya—a financial market facilitation agency in Nairobi, Kenya; and b) six minicase studies of financial market facilitation interventions from the wider FSD Network, by the FinMark Trust, FSD Kenya, FSD Tanzania and FSD Zambia. The aim of this process was to build the knowledge base around the art of market facilitation in the field. These case studies revealed a lot of insights about effective market facilitation, the challenges the Financial Sector Deepening (FSD) Network faced while designing and delivering interventions using the M4P approach and the lessons they have learned so far.
The M4P synthesis paper (this publication) explores the art of market facilitation in action through the lens of the FSD network and synthesises learnings gained from these case studies to build understanding around the M4P approach. The paper examines the wider lessons and challenges that emerge for organisations addressing the dilemmas of developing financial markets for the poor and how they differ significantly from other conventional approaches.
