By James Allman-Gulino, KF11 Uganda


Some of the best work that microfinance can do is in post-conflict regions, particularly those with internally displaced persons (IDPs).  These people may have been forcibly relocated from their homes and made to stay in makeshift camps because violence was too severe around their villages, as was the case in Northern Uganda during the government’s fight against the Lord’s Resistance Army (LRA).   The conflict with the LRA had been off-and-on for over twenty years, with the LRA committing many atrocities against civilian populations, but in 2008-9 the Ugandan Army managed to significantly weaken the LRA and expel most of their remaining fighters.  However, many IDPs in Northern Uganda are still living in IDP camps, or are just starting to return home in piecemeal fashion.  This often leads to severely fragmented social structures, and unsurprisingly means there is a lack of stable jobs for IDPs both at home and around the camps.

A partially vacated camp near Acholibur, Uganda

Microfinance, particularly group borrowing, can go a long way towards addressing these problems.  The capital that borrowers receive can expand a business enough to generate profit for a return journey home, or can allow a borrower to diversify their sales (i.e., selling sorghum in addition to running a small restaurant).  This diversity of product can help the borrower when movement of people has thinned the customer base for their primary business.  Groups of borrowers can also help support one another and rebuild social connections.  A group of women borrowers I met in Acholibur, a village in Northern Uganda that was significantly affected in the LRA war, said that borrowing has “given the group a sisterhood” and helped unite them when they’ve been separated from other family members.  The borrowers pictured below  belong to groups organized mostly from IDPs still living in the camps near Acholibur, and basically couldn’t stop talking about what their group membership has meant to them in the wake of the conflict.

Group borrowers in Acholibur

As I always like to stay realistic about things, it’s important to note that obviously microfinance isn’t a cure-all in these situations.  Effective administration of group loans can be particularly difficult when you have a transient population.  The groups I met talked about the significant challenges they faced because some members were moving back to their villages or might have to relocate from a camp dwelling quickly, leaving their weekly contribution unpaid and the group responsible for the money.  Additionally, operating in these regions often requires external support to allow MFIs to keep their employees safe.  BRAC, for instance, which has programs in Northern Uganda, Afghanistan, and other post-conflict regions, has funding partnerships with the UN and other organizations that allow them to work in such challenging areas.  It’s certainly no detractor that MFIs may need donor financing to keep safe employees who are doing such valuable work for IDPs and other populations affected by war; it’s just worth pointing out that the organizations who operate in these dangerous areas aren’t always magically “self-sustainable” just because they work in microfinance.

But more than any of my impressions here in Northern Uganda, I’ve been amazed by the resiliency of the borrowers and the larger community.  Many people here were LRA prisoners and just narrowly survived – yet only casually mentioned this fact after talking to me about the conflict for 15-20 minutes.  But almost everyone here is hopeful for the region, and believes that new stability and programs like BRAC’s microfinance can really help people improve their lives.   Several people I talked to said that re-establishing trust and social bonds were the first key steps for Northern Uganda, and achieving those ends in a way that also strengthens local businesses is an incredibly powerful program for the region and its IDPs.

To support BRAC Uganda and their work in Northern Uganda, please consider making a loan to one of their clients today!


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