Financing Refugees, Building Resilience
Why refugees can't access financing
It is easy to talk about starting a business, but always the biggest question is how do you kick start this business? Where will the financing come from? While most people look at bootstrapping techniques, refugees don’t have jobs or opportunities to pool financing.
And unfortunately, refugees are unable to get financing from mainstream financial institutions because they lack assets for use as collateral. In addition, refugees are considered a high-risk category because they can be resettled at any time, which makes the repayment process a challenge.
While there are other sources for financing from local savings groups, these charge high interest (up to 15% per month) and also give only low amounts (up to $100, which is too small for many to start a business).
How do we finance refugees
Patapia gives friendly financing to refugees so that they can start and grow their own businesses. Our financing requires no collateral and charges very low interest.
To us, it’s not about amassing profits but rather, providing a sustainable platform to uplift refugees out of poverty.
To ensure full repayment, we use a community financing approach, where those financed provide a guarantee and support network for each other. Through community financing, the women form groups – business families of up to 10 women who sign as guarantors for each other. Therefore, if a woman in a group fails to repay, other members of the group are required to repay. Therefore, the women check on each other and offer support towards running the business, and mental and physical well-being so that each woman is able to repay.
The business financing is a follow on to our Build A Business program, where the trained refugees can then get access to financing to start and grow their businesses.