Uganda currently hosts approximately 1.83 million refugees and asylum seekers, making it the third-largest refugee-hosting country in the world—and the largest in Africa (UNHCR, 2025). This number continues to grow each month due to ongoing conflicts in neighboring countries.
Kyangwali Refugee Settlement, located in Western Uganda, hosts over 146,000 refugees and asylum seekers. Established in the 1960s to accommodate Rwandan refugees, the settlement saw many Rwandans voluntarily repatriate in 1994. Since then, it has primarily hosted Congolese refugees. A new influx of refugees from the Democratic Republic of Congo (DRC) began in mid-December 2017, significantly increasing Kyangwali’s population and placing a heavy strain on existing services.
Today, Kyangwali is home to refugees from the DRC, South Sudan, Rwanda, Burundi, and Ethiopia. Thanks to self-reliance initiatives, many refugees are able to grow their own food and trade surplus production for essential goods. However, despite progress in self-sufficiency, refugees in Kyangwali continue to face significant barriers to financial inclusion, limiting their ability to invest in and grow sustainable livelihoods.
UGAFODE, one of Kiva’s Lending Partners, began its refugee financing journey in 2018, initially serving urban refugees, with funding from Kiva.org. As UGAFODE expands its refugee lending, Kiva has supported the organization with capacity-building efforts, helping to build a new office and launch operations in a new refugee settlement. In 2020, it established its first physical presence within a refugee settlement with a branch in Nakivale Refugee Settlement in Isingiro District. UGAFODE now operates two service points in Nakivale: one at the main branch and another in Rubondo.
Alayisa took a Kiva loan through UGAFODE to purchase more items for her used clothing business.
Gathering evidence to inform capacity building
To expand its reach among refugees, UGAFODE joined a baseline study under the Refugee Finance to Grow Income, Improve Assets & Resilience Through Bundled Services (REFINE project) — a partnership between Kiva and Mercy Corps — to identify the main challenges refugees face in accessing financial services in Uganda.
Featuring two other Kiva Lending Partners as well as UGAFODE, the assessment revealed several key challenges:
Financial Service Providers (FSPs) have limited loan capital that they can on-lend to refugee clients
It costs more to serve refugees due to operational complexities caused by remote settlement locations, stringent Know Your Customer (KYC) requirements, and limited understanding of refugee client needs
Refugees have poor or nonexistent credit history and a lack of collateral or assets, making it difficult to access conventional financial products
Refugees have low to medium levels of digital literacy, reflected in limited use of mobile devices for basic digital transactions and communication
Increasing reach and improving financial services for refugee clients
To close these gaps, Kiva, through a refugee-focused grant from The Conrad N. Hilton Foundation, partnered with UGAFODE to enhance access and improve the quality of financial services for refugee clients. The initiative focused on opening a sales center within the Kyangwali Refugee Settlement, bringing financial services closer to the community and helping reduce the cost of access.
In addition to improving physical access, the initiative also included:
Capacity building for UGAFODE staff, equipping them with the skills and knowledge needed to effectively engage and serve refugee clients
Financial literacy training for refugees to build their understanding of financial products and responsible financial behavior
Building the foundation for financial inclusion in Kyangwali
Establishment of a Sales center
Kiva staff, UGAFODE staff, and FMO staff at the new sales center.
The project was co-funded by UGAFODE and Kiva and was implemented between January and June 2024.
The new sales centre in Kyangwali operates under UGAFODE’s Kyarushesha Branch (30 km away) and offers:
Customer profile creation, i.e., opening an account
Mobile banking enrollment
Saving mobilization into personal accounts
Loan applications, appraisal, and approvals via a dedicated on-site credit committee
To reduce risk and improve efficiency, the sales centre doesn’t handle cash. Instead, it uses mobile money, agency banking points, and digital wallets so clients can access their accounts securely.
“ Having a presence [physical sales office] in the refugee settlement has significantly increased refugees’ confidence in our (UGAFODE) services, especially given past experiences with scammers who disappeared overnight. Being on the ground also makes it easier to address challenges as they arise.”
— UGAFODE Kyangwali Sales Center Staff
Staff training on refugee lending
The Sales Centre staff received training from the Association of Microfinance Institutions of Uganda (AMFIU), one of the project partners, on refugee-sensitive service delivery, covering cultural awareness and communication skills needed to serve refugee clients with dignity and professionalism. Additionally, UGAFODE has hired several refugees as employees at the Sales Centre, which has been instrumental in fostering refugee integration within the host community’s operations. Refugee staff members also facilitate stronger rapport with refugee clients during product sales, as they speak the same language and understand their specific needs. As a learning point, UGAFODE updated its HR policies to explicitly include refugee recruitment as part of its ongoing staff integration efforts.
Financial literacy
AMFIU also provided financial literacy training to 2,023 refugees in the settlement to enhance their understanding of savings, borrowing, budgeting, and the financial products and services available through UGAFODE. Since opening its doors in the settlement, over 240 refugees have accessed credit facilities, with additional clients being onboarded each month. Additionally, approximately 300 community members were trained during the initial stages of the sales center’s operations to support client mobilization, language translation, and provide financial literacy training.
Refugees thriving with financial access
“Initially, the seven of us lived in one room, which was not nice. Thanks to the increased income, I have been able to build a four-bedroom house and I can pay school fees for my children, two of whom are in secondary school and I put them in boarding school.”
- Anonymous client
Since the implementation of the project, UGAFODE has significantly expanded its reach among refugee clients. The construction of the sales centre in Kyangwali provides much-needed access to financial services in the settlement, and it also provides UGAFODE with a third outlet through which to serve refugees in Uganda. More refugees continue to seek financial services aimed at supporting income-generating initiatives, enabling them to invest in their futures and rebuild their lives.
Grace took a Kiva loan through UGAFODE to buy feed and vaccines for her cattle.
One refugee, Maria, shared how access to UGAFODE’s refugee-focused financial services played a pivotal role in her journey toward recovery and self-reliance, highlighting the transformative impact of tailored, inclusive financial solutions.
“I arrived in Kyangwali Refugee Settlement in 2015 from the Democratic Republic of Congo. Life was hard as I struggled to look after my five children. I tried petty trade in several items such as vegetables and millet porridge, but I lacked capital to grow my business. Last year (2023), I got to know about UGAFODE, and so far, I have gotten two loans from the institution. With those loans, I was able to expand my business of selling clothes and shoes, which enabled me to increase my income and improve my quality of life. Initially, the seven of us lived in one room, which was not nice. Thanks to the increased income, I have been able to build a four-bedroom house and I can pay school fees for my children, two of whom are in secondary school and I put them in boarding school. I thank UGAFODE for supporting my growth, and I will definitely go back for the third loan.”
- Maria, UGAFODE client
Kiva’s continued learning through capacity-building initiatives
This initiative helped Kiva deepen its understanding of refugee financial inclusion, challenging long-standing assumptions and reinforcing the potential of refugee clients as responsible and capable borrowers.
Key learnings from this project include:
Refugees are creditworthy: Refugee clients have demonstrated the capacity to repay loans, highlighting the need for UGAFODE to expand its operations to reach more refugee clients. This proves that, given the opportunity, refugees can and do repay their loans reliably.
Evidence-based capacity building is essential: Conducting needs assessments and implementing ongoing impact measurement was vital in shaping relevant, effective interventions.
Local partnerships matter: collaborating with local organizations like AMFIU enhanced our impact and outreach by providing complementary services, such as financial literacy training for refugees, and empowering UGAFODE staff to serve refugee clients more effectively.
Bridging language and cultural gaps is critical: Employing qualified refugee staff helped overcome language barriers and improved cultural understanding, strengthening trust within the community.
After eight years of providing tailored, effective capacity-building support for partners, Kiva remains deeply committed to capacity building. By strengthening financial service providers and social enterprises, we can create even more meaningful change for underserved communities around the world.
