Partner Organization: BFA Global

Rebuilding livelihoods in displacement

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.

What financial services would you need if you found yourself as a refugee?

Posted on by 5iveafrica

I often find it difficult for most people to relate to refugees. We seem to forget that we can be in the same situation depending on the circumstances around us. The happenings in Ukraine have shown just how delicate our stability status is, and that we can quickly be turned into forcibly displaced people overnight!

While conflict, war or persecution have been traditionally viewed as the main forces giving rise to refugees, natural disasters triggered by climate change among others are fast becoming a force to reckon with. The number of forcibly displaced people has now surpassed 100 million for the first time, fueled by the war in Ukraine and other ongoing conflicts around the globe.

This takes me back to a scenario in June 2018 when FSD Africa, FSD Uganda and BFA Global were conducting a design sprint with 6 Ugandan financial service providers (FSPs), to develop new ideas for financial products and services for refugees in the country. The 4-day event reached a phenomenal breakthrough when one of the participants posed: “What if something happened and we found ourselves in another country as refugees? What financial services would we need?” Those two questions opened the minds of the participants and ideas started flooding in. The design sprint was one of the 4 steps that FSD Africa has been following to develop financial inclusion for refugees (FI4R) projects. The other 3 are:

  1. Market assessments that capture the financial lives of refugees and show the potential of serving these populations.
  2. Innovation competitions where FSPs are invited to pitch ideas of how they would address refugee financial needs
  3. Financial support and technical assistance to FSPs to develop, pilot and roll-out financial solutions.

In Uganda, working with FSD Uganda, we identified Equity Bank Uganda Limited, VisionFund Uganda and Rural Finance Initiative to offer financial services in various refugee settlements from October 2019. While the project concluded in March 2022, these FSPs have continued operations as this turned out to be a viable business for them. The project engaged BFA Global as the learning and research partner. They undertook a baseline study in January 2020 and a series of 4 financial diaries (linked below) – capturing the financial needs and uses of refugee households.

The 4 financial diaries:

They then carried out an endline study in November 2021. The partners achieved the following results:

  • Over 26,300 customers accessed loans, with 73% being female
  • Cumulative loans amounted to £9 million ($2.7million)
  • 262 bank agents were recruited across the settlements, 15% of which were women
  • Over 93,300 households registered on Equity Bank Uganda’s digital platform
  • 65,484 households receiving digital payments as of March 2022.
  • The bank made payments worth UGX 10.8 Bn (£2.2m) during the first quarter of 2022
  • 8 humanitarian agencies used the Equity Bank Uganda platform for disbursements

Below is a summary of some of the different financial services offered by the FSPs:

Based on the end-line study findings, there is still work to be done to improve financial services for refugees in the following areas:

 

BFA Global and FSD Africa create pioneering $3.3m fintech venture launcher for climate resilience in Africa

Posted on by TIMOTHYRADIER

NAIROBI, Kenya, April 22, 2022 – Today BFA Global and FSD Africa announce the creation of a first-of-its-kind venture launcher, TECA (Triggering Exponential Climate Action). The launcher will create fintech startups with solutions that enable climate resilience in the most vulnerable communities around the world, with an initial focus on Africa. With FSD Africa’s $3.3m investment over 4 years, TECA will support pioneering entrepreneurs from idea stage to launch, expanding the pipeline of investable opportunities in the fintech for climate resilience space. FSD Africa’s support will also accelerate the ecosystem around the ventures by engaging with multiple stakeholders to unlock capital, attract talent and create proof points to spur more innovation for climate resilience.

At FSD Africa, we believe that a strong, fair and accessible financial system is crucial to a sustainable future for Africa’s people and its environment. In particular we believe that finance can play a major role in tackling climate-vulnerability and that by harnessing the power of fintech innovation we can help address market barriers to building out much needed climate resilience solutions. The challenge for Africa is that this innovation is stifled by a weak ecosystem, reflected in low early-stage investment. Our partnership with BFA Global on TECA aims to address this by originating, investing in and growing a pipeline of climate resilience ventures, while helping to influence and expand the pool of investment into this space

Juliet Munro, Director, Digital Economy at FSD Africa

 

TECA will help to create pipeline at the nexus of fintech and climate resilience by backing entrepreneurs with bold ideas that build the resilience of vulnerable communities and natural ecosystems. We are looking for top talent that can push the boundaries in solving these large systemic challenges. By helping to launch new ventures responding to these emerging issues, our vision is to help create an ecosystem abundant with innovative solutions fortifying the climate resilience of vulnerable populations and the planet.”

David del Ser, Chairman and Chief Innovation Officer at BFA Global