By Mulengera Reporters
Uganda’s efforts to expand access to affordable finance for women entrepreneurs are beginning to reach refugee communities, with microfinance institutions reporting increased uptake of business financing and financial literacy services under the Government’s Generating Growth Opportunities and Productivity for Women Enterprises (GROW) Project.
At UGAFODE Microfinance Limited, the programme has opened a new channel for women in refugee and refugee-hosting communities to access relatively affordable credit, although the institution says demand for the funds remains significantly higher than the resources available.
Florence Mutonerwa, Head of Product Development, Research and Marketing at UGAFODE and the institution’s focal person for the GROW Project, said the partnership has demonstrated that refugee financing can be both practical and sustainable when delivered through institutions with experience serving underserved communities.
“When GROW came on board, they had implemented for about three years but had given only eight loans to refugees,” Motonewa said, describing the challenge of reaching refugee entrepreneurs before UGAFODE became involved.
She said UGAFODE’s experience in financial inclusion helped demonstrate that refugee entrepreneurs could be incorporated into the programme.
UGAFODE is implementing the project in several hard-to-reach areas, including Kyotera, Isingiro and Nakivale in southwestern Uganda, as well as Rubirizi, Mitooma, Rwampara, Buhweju and parts of the Kigezi region. In eastern Uganda, the institution is also operating in the Bugisu region, including Bulambuli and Bududa.
The expansion is significant because refugee-hosting communities often face barriers to formal financial services, while women entrepreneurs have additional challenges accessing capital to grow businesses.
Mutonerwa said the GROW financing has also helped UGAFODE attract new women customers and strengthened the institution’s relationship with communities that previously had limited access to affordable credit.
Beyond lending, UGAFODE has incorporated financial literacy and entrepreneurship training into its intervention. The training covers areas such as responsible use of credit, entrepreneurship skills and decision-making.
The institution also involves men in some communities, particularly where household decision-making can affect women’s ability to use and control business financing.
“We bring the men on board and tell them, yes, let’s listen, let’s reason together and support the woman to grow,” Mutonerwa said.
Reach extends beyond loans
One of the clearest indicators of the programme’s reach, according to UGAFODE, is the number of people exposed to financial literacy services.
Mutonerwa said that between January and September, the institution had reached more than 4,000 customers through financial literacy programmes supported by GROW.
The figure, she said, illustrates the potential size of the refugee and women’s enterprise market, even though the number of direct beneficiaries of credit is smaller.
Uganda hosts a large refugee population, with refugee settlements including Nakivale, Rwamwanja, Kyaka and Kyangwali among areas with substantial refugee populations. Mutonerwa said women and young people constitute a significant share of the refugee population, creating a sizeable potential market for financial services.
However, she stopped short of setting a specific target for the number of refugee women UGAFODE expects to reach over the next three years.
Instead, she said future coverage would largely depend on the amount of funding made available through the GROW programme.
“The more money they give us, the more customers we reach,” she said.
Demand remains greater than available funds
The programme’s growing reach has also exposed one of its central challenges: demand for affordable capital substantially exceeds supply.
UGAFODE has more than 120,000 customers, according to Mutonerwa, but she said the financing needs of its customer base extend far beyond what the GROW funds can currently provide.
“The need is too enormous compared to the availability of the funds,” she said.
The challenge is particularly important because GROW financing is designed to help women move their businesses from one stage of development to another rather than simply provide repeated access to subsidized credit.
Mutonerwa said the programme limits individual beneficiaries to two loan cycles, allowing the institution to extend the funds to other women while giving existing borrowers an opportunity to strengthen their businesses.
The loans are generally structured for periods of six to 12 months, with the expectation that entrepreneurs will invest the money in productive activities, generate returns and repay the financing so another beneficiary can access the funds.
According to Mutonerwa, UGAFODE has already seen customers use the financing to progress their businesses, although the institution did not provide detailed figures on business growth, repayment rates or changes in incomes.
A test of whether inclusion can scale
The experience of UGAFODE points to a broader question for the GROW Project: whether affordable financing can be scaled sufficiently to meet the demand among women entrepreneurs, particularly in refugee-hosting and other underserved communities.
The GROW Project is a Government of Uganda initiative funded by the World Bank and implemented by the Ministry of Gender, Labour and Social Development together with the Private Sector Foundation Uganda. It seeks to increase women’s access to entrepreneurial services and help businesses move from micro to small and from small to medium enterprises.
According to GROW Project Coordinator Dr. Ruth Aisha Kasolo, 14 financial institutions, including Centenary Bank, Finance Trust Bank, PostBank Uganda, DFCU Bank, Equity Bank Uganda, Stanbic Bank Uganda, UGAFODE Microfinance and Ebo SACCO, are enrolled to enforce the programme.
The involvement of multiple financial institutions provides the programme with a wider distribution network, but it also makes measurement of overall impact important. The number of loans disbursed alone may not fully demonstrate whether businesses have grown. Indicators such as enterprise survival, revenue growth, employment creation, repayment performance and movement between business categories will be important in assessing the programme’s longer-term results.
For refugee communities, the test is similarly whether access to finance translates into sustainable enterprises and greater economic independence rather than temporary access to credit.
Mutonerwa said UGAFODE is prepared to continue working with government and development partners to extend financial inclusion initiatives beyond the current GROW programme.
She also urged continued investment in programmes that expand women’s access to finance, describing women’s economic empowerment as an important component of Uganda’s longer-term development ambitions.
For now, the experience of GROW through UGAFODE presents both an opportunity and a warning: affordable finance can reach women in refugee and hard-to-reach communities, but the scale of unmet demand means that expanding access will require sustained financing, effective targeting and evidence that the loans are translating into durable business growth.
