Beyond Aid: How Savings Groups Cultivate Resilience in Fragile Contexts

For years, the narrative surrounding refugees has been one of dependency. When Seed Effect first began its work, many doubted that refugees were capable of providing for their families and that savings groups could even empower refugee communities. The common perception was that refugees, facing economic hardship and instability, wouldn’t be able to save, invest, or repay loans. The belief was simply that they needed a handout. 

But what if that narrative was wrong?

At Seed Effect, we’ve witnessed firsthand the transformative power of Savings & Loan Groups in some of the world’s most fragile contexts. From South Sudan to Northern Uganda, we’ve seen refugees defy expectations, proving their capacity to not only save and invest but also to build thriving businesses and communities.

Overcoming the Barriers

Refugee communities face unique challenges:

• Economic Exclusion and Limited Livelihoods: While Uganda is one of the friendliest host countries in the world, the refugees that have relocated there often face challenges accessing employment, buying land, and being able to afford to move around the area, leading to high unemployment rates and poverty.
• Displacement and Instability: Seed Effect operates in refugee settlements and post-conflict areas where communities have fled fighting, persecution, or disaster. This displacement leads to economic instability, emotional trauma, and social fragmentation.
• Social Tensions and Cultural Diversity: The mix of different ethnic groups, languages, and cultural norms can create social tensions, which can impact trust and group cohesion. While we are so grateful that there are few reports of tribal conflict in this region, it unfortunately does happen from time to time.  

Seed Effect has taken steps to address these challenges:

• Flexible Savings Cycles: Although most groups choose 1-year savings cycles, we do offer 9-month options to address mobility needs. 
• Language and Cultural Adaptation: Training materials are translated into local languages (currently, four languages are offered), and culturally sensitive approaches are employed to enhance understanding and engagement.
• Trust-Building: To foster social cohesion in culturally diverse groups, extra emphasis is placed on restoring broken relationships. 
• Integration with Trauma Healing and Support Services: Recognizing the emotional toll of displacement, through a partnership with Tutapona, we have incorporated trauma-informed care and training where available. 

In addition, participation in Savings & Loan Groups has proven to be a catalyst for resilience, fostering:

• Economic Empowerment and Diversified Livelihoods: Members are empowered to start and grow small businesses, reducing dependency and increasing income stability. 
• Social Cohesion and Community Support: Savings & Loan Groups foster a sense of community and trust, helping participants build social capital and mutual support systems, which is crucial in fragile settings.
• Improvement in Planning for Future Needs and Challenges: On average, Seed Effect members report having less than $7 in savings when they join our groups. At the end of the first cycle, they report, on average, over $60 in savings, and this amount continues to grow year after year. 
• Emergency Fund Access: Members can plan for the future and handle emergencies with increased savings and access to emergency funds, reducing vulnerability to crises.
• Psychological Resilience and Hope: The ability to save, access credit, and engage in productive activities has restored a sense of dignity and hope among participants. Madilana, a member of the God is Good Savings & Loan Group in Baratuka shared: 

“I can definitely see my life has been transformed. When I was not in the savings group, I used to try to ask for help from people. I would go to someone and ask for help & then the person would say, “There’s nothing.” That is a disappointment. You expect someone to help you, but you don’t get the help. Life had been really difficult. But now, in the Seed Effect group, things have become easier. As I save, I have access to loans. Now instead of going to people to beg when I have problems, I come to the group and take a loan. This loan helps me to pay school fees, hospital bills, medication, and buy food.”

A Foundation of Faith

At Seed Effect, we believe and have seen that the hard places are worth investing in, that how we help truly matters, and that true transformation and restoration can’t happen apart from Jesus. We see refugees as resilient and resourceful individuals who are capable of building brighter futures and providing for their families with dignity. Seed Effect is committed to planting these seeds of hope, confident in the extraordinary harvest that will follow.