Seventy kilometres from Malawi's capital, Lilongwe, the Dzaleka refugee camp in Dawa, established in 1994, has evolved from an old prison camp situated on just 201 hectares of land to a vast township of 42,000 refugees and asylum seekers.
The number of people who have fled to Malawi rose from almost 17,000 in 2013 to nearly 45,000 at the end of 2019, swelled by asylum seekers from the Democratic Republic of the Congo, Burundi, Rwanda, Somalia and Ethiopia escaping poverty and cycles of violence. In common with refugee camps across the continent, many of Dzaleka's residents are economically inactive and struggle to access sustainable employment, finance and healthcare.
It may seem counterintuitive that any financial services company would consider offering lending to displaced persons. Refugees typically struggle to access credit given that many lack a permanent address, official documents and ID papers. But financial services company MyBucks is now helping to provide residents with a credit lifeline, offering services to customers with a poor or non-existent credit record.
The initiative began in April 2018 when the Frankfurt-listed firm's New Finance Bank subsidiary opened the first ever bank branch in a refugee camp. The branch serves as a base for banking services, remittances and ATMs, while technology enables the bank to disperse micro loans to budding entrepreneurs--MyBucks' lending software can predict borrowers' ability to repay, thereby allowing the bank to make and manage the loans.
The bank hires refugee agents to promote its services to other residents of the camp. Figures released in November 2019 indicate that since the launch of the initiative more than 7,500 accounts have been opened for Dzaleka residents. The camp has seen an increase in entrepreneurship, which has given rise to successful micro-businesses ranging from piggeries and poultry farming to fashion design, grocery stores, hair dressing salons, and restaurants.
The United Nations High Commission for Refugees (UNHCR), which co-manages the camp alongside the Malawi government, helps to support the initiative by providing inputs to refugee enterprises. The UNHCR works to ensure that refugees and asylum seekers receive international protection and have access to education, healthcare, food, shelter, water and sanitation.
Richmond Msowoya, the UNHCR's livelihood officer at Dzaleka, says that many of the displaced people in the camp have the skills to run smallholder...