KAMPALA– A new study has found that majority of refugees are borrowing funds as Ugandans.
According to a report from a survey carried out by Platform for inclusive finance, refugees borrow as Ugandans but informally.
Among the reasons fronted for this included lack of information, contact and misinformation about refugees that fuels the perception of refugees as high risk clients which has pushed most of them to borrow as Ugandans.
It is alleged that most of the refugees are into business with the average debt of Shs540,000.
Refugees do smaller and fewer businesses compared to local businesses, but with the same activities of agriculture, trade and services.
At least 72% of refugees have their own business.
“The biggest obstacle to business growth is lack of start-up/working capital. This has been brought about by legal limitations as well as societal fears and prejudices reflected in public policy and media which cause FSPs concerns about their reputation,” reads a report that was launched at Hotel Africana.
The report found that 75% of refugees save money daily, weekly or monthly. Men are more mobile and save with their wives while on the other hand, women save in VSLAs/SGs. Urban refugees and youth are more likely to have a smart phone and use a mobile wallet (90% have phones).
Furthermore, the report found that there are 29,053 recorded savings groups and SACCOs among refugees. While these help with small loans, they cannot meet demand for credit.
Most charge 2% interest per month, require guarantors and collateral.
As of April 18, 13.6% of the registered adult refugees live in Kampala. Majority of the refugees (65%) live in the North, 7% mid-west (Kiryandongo and Kyangwali) and 15% in South West like Nakivale, Rwanwanja, Oruchinga and Kyaka II.