ACQUISITION OF FINANCIAL SERVICES BY SMALL SCALE BUSINESSES AMONG INDIGENOUS COMMUNITIES IN URBAN CENTERS. A case of the Karamojong community in Jinja Municipality, Jinja District-Uganda.

Abstract

Business is the new livelihood of the urban Karamojong. However, the Karamojong face daily challenges as they struggle with already-established traders to attract customers in urban market settings. Previously, commercial banks had not addressed the needs of the Karamojong, who generally lacked collateral required to secure commercial financial services. However, with the introduction of microfinance institutions, the Karamojong have been able to advance their businesses and meet their basic living needs. Microfinance services have played an important role in the growth of Karamojong small businesses in Jinja Municipality, while also providing the Karamajong insurance in times of emergency.

This study explores the experiences of Karamojong small business owners in Jinja Municipality in acquiring financial services. It investigates the types of businesses the Karamojong operate, the financial services available to them, the challenges they encounter, how things can be improved, how these businesses have impacted the lives of the urban Karamojong, and finally, how the relationship between the Karamajong and microfinance institutions has changed over time.

Qualitative data was gathered from 19 participants through observation, focus group discussion and interviews in Jinja Municipality. In the past, and still today to some degree, the Karamojong have been misrepresented, manipulated and discriminated against in Jinja Municipality and even in their places of work. The Karamojong were found to operate kiosks, local breweries, cereal sorting, charcoal, wooden and steel products. This research took into consideration both age and gender of those involved in business; more of the business operators were women, though it was easier to approach men than women. Participants had acquired financial services from microfinance institutions and Village Saving and Loan Associations. The microfinance institutions in particular offer training in financial management skills to their Karamojong clients, leading to further opportunities for the Karamojong to better their businesses, beyond simply having access to necessary small-scale capital, which has also had an impact on how the Karamojong are seen in the wider Jinja community. Today, the urban Karamojong are able to pay house rent, feed their families and cover their children’s school fees, due to the positive influence microfinance opportunities have provided.