Access to finance remains a challenge for many start-ups and micro, small and medium enterprises in general. The situation is especially critical for entrepreneurs from vulnerable communities, such as refugee entrepreneurs who face additional challenges compared to other entrepreneurs, including lack of collateral and limited access to business development services. Additionally, they are often perceived as risky by financial service providers due to their refugee status.

At a meeting of stakeholders from the financial sector, providers of business development services, refugee entrepreneurs, government institutions and development partners, easier access to finance for refugees and the host communities was highlighted as a way to deepen economic inclusion.

The Business to Business (B2B) conference held on Friday, January 27 at Lemigo Hotel, was organised on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Union by the German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in collaboration with Digital Opportunity Trust (DOT Rwanda). The conference brought together key stakeholders, including representatives from MINEMA, UNHCR, World Bank, National Bank, PSF, BDEU, City of Kigali, UNCDF, GIZ, GOPA, DOT Rwanda, RICEM and different Financial service providers (FSPs): BDF, I&M Bank, BPR, Umutanguha Finance Ltd, AMIR and INKOMOKO urban refugee entrepreneurs and the refugee representative.

The B2B event, themed "Stakeholder Dialogue on Access to Finance for Refugees and Host Communities,” was organised in order to create awareness on available financial products and bring together refugee and host community entrepreneurs with commercial banks and micro-finance institutions and advocate for more products and access to finance for refugees and host communities.

Under the theme "Improving access to finance for refugees and host communities through strengthened and coordinated ecosystem of key stakeholders” a panel of experts in the sector discussed challenges and best practices for supporting refugees and host communities to access financial products and proposed strategies for improved services for refugees.

"Easier access to finance for refugees and host communities will lead to greater self-reliance, creation of businesses and improved livelihood. The refugees and their host communities are encouraged to start businesses, but they don’t have access to finance,” said Violette Uwamutara, Africa region vice-president and country director of DOT Rwanda.

"It is high time we discuss these issues with financial service providers, the beneficiaries and all the stakeholders to see how these challenges in access to finance can be tackled.”

The stakeholders’ dialogue was the first to be held and it was agreed that more events involving refugees and the host communities and financial service providers are needed in order to find tangible solutions to the said challenges.

Similar events will take place in the refugee hosting districts of Huye, Nyamagabe, Gisagara, Gicumbi, Kirehe, as well as in Mahama refugee camp over the coming weeks.

There are 127,000 refugees in Rwanda. About 90 per cent of who live in camps, across the country.

In his presentation on findings from research by National Bank of Rwanda, Mr. Simon Pierre Ndayisenga representing the Bank, among other findings mentioned that 77 per cent of income for camp-based refugees comes from monthly humanitarian assistance, while only 26 per cent come from informal labour. In the refugee-hosting communities, self-employment contributes 58 per cent of income, while 31 per cent comes from informal labour.

Refugees, who benefited from the project "Economic Inclusion of Refugees and Host Communities (ECROEF), co-funded by BMZ) and the European Union and implemented by GIZ, testified that easier access to loans will lead to better livelihoods.

"It is very difficult to sustain a family with only the monthly allowance. But thanks to assistance from different organisations, I now have a soap-making business and during the Covid-19 pandemic I even produced hand sanitisers. I have also trained 300 hundred refugees in camps,” one of the beneficiaries said.

"Despite the challenges, we have noted the resourcefulness and entrepreneurial spirit of refugee and host community entrepreneurs, and there are several good examples of entrepreneurs with established businesses and bankable plans for further growth,” said Nanda Ritsma, the Project Manager of ECOREF at GIZ Rwanda.

"We look forward to continuing bringing together financial service providers, refugee and host community entrepreneurs and partners to build trust and a better understanding for the needs of this specific market segment.”

The lack of collateral is highlighted by financial service providers as a major hindrance to greater access to loans offered to refugees.

However, according to Inkomoko, a business development consultancy firm, financial institutions should not worry much about collateral because loans to refugees have a high loan repayment rate (over 90 per cent).

The representative of the Ministry of Emergency Management (MINEMA), Mr. Eric Mutabazi said that development partners, humanitarian organisations and financial institutions in particular, need to collaborate to address issues facing refugees and small businesses, such as lack of knowledge about business development services.

"By raising awareness about available financial and business opportunities through financial literacy, refugees and the host community members will be able to contribute to their own wellbeing and become self-sufficient,” Mutabazi added.