In this webinar three financial service providers (FSPs) that serve refugees discuss solutions to some of the problems created by the COVID-19 crisis and how they have adapted their operations. Although focused on Uganda, there are many lessons which can be adapted to other locations. DFI partnered with PHB Development and Opportunity International on the webinar.
The webinar was moderated by Pete Sparreboom, Director PHB Academy, PHB Development and panelists were:
• Noah Ssempijja, Consortium Lead, Uganda Refugee Programme, Opportunity International
• Hannington Thenge, Business Research and Development Manager, Ugafode Microfinance Ltd
• Christopher Kalimba, Manager, Moban SACCO, Nakivale Refugee Settlement Uganda
• Jane Mugenyi, Manager Strategic Partnerships & Corporate Sales, MTN Uganda
Noah outlined how Opportunity International had continued with the financial diaries exercise they were conducting with about 200 refugees in two settlements, and this helped to understand the impact of COVID-19 as a baseline had been established. After just one week of lock down income from casual labour had dropped 58% and businesses registers a 54% drop in income. Not only did income fall but before lock down around 86% were saving and this stopped almost all together a week into lock down and withdrawals from savings can be seen.
Given the challenges refugees are facing economically and due to restriction of movement, MTN, UGAFODE and MOBAN (SACCO) had to adapt in order to continue providing financial services. For MTN they saw the decline of economic activity which means less mobile money transactions which impacted their business. They had recruited people within the settlements themselves as agents which helped as they could move within the location, they gained the trust of other refugees as they too were refugees and MTN reduced the capital requirement to help get them started in their roles. MTN are also working to increase agent productivity and merchant recruitment and activity which will help increase mobile money transactions and reduce the need for cash. Both MTN and MOBAN faced liquidity challenges, transporting cash was difficult. MOBAN and UGAFODE both experienced withdrawals from their savers and reductions in accounts being opened. Repayment of loans were affected and fewer loans were being granted. UGAFODE negotiated with Kiva for a 100% loan guarantee for refugees during this time, a great initiative to allow the provision of credit during difficult times.
The issuance of refugee ID which can be validated and used for KYC and identification purposes helped significantly and remote account opening and digital products can be developed further due to this. The government also allow a family attestation letter which can also be used for ID purposes, but more refugees need to be aware and use this to help give them access to financial services. Interactions with customers have also changed, but small groups (4-6 people) can still meet with agents/field teams, with these being issues with masks, sanitiser and trained on social distancing.