Could you tell us a little about yourself and your organisation?
I am the CEO and co-founder of African Entrepreneur Collective (AEC), a network of business development service providers in Rwanda and Kenya. We also have in-house debt funds, so we can support entrepreneurs through a variety of training, consulting, and financing services. Really our ultimate goal is to help businesses grow, so that they can not only improve the livelihoods of the entrepreneur and their families, but also create jobs for others in their communities.
AEC started in late 2012, working primarily with small and medium enterprises in Rwanda. During the global refugee crisis in 2016, we were approached by UNHCR. Rwanda at that time was innovating refugee support, pivoting away from provision of supplies to cash transfers. Instead of big trucks going out into the refugee camps every month with sacks of maize, cooking fuel and sanitary pads, UNHCR and World Food Programme started sending the money equivalent of those of those goods via mobile money. As the world sees an increase of refugees needing support and money is spread out across so many new crises, UNHCR has to find ways of increasing efficiencies with limited funds. Switching to mobile money transfer saves millions of dollars a year on logistics costs in Rwanda alone, and keeps more money circulating in local economies.
As UNHCR/WFP were infusing cash into refugee communities, they wanted to ensure there were refugee businesses that could leverage the cash to provide essential goods and services that were previously donated. We felt confident enough in our own program to support these efforts and see results.
What is your programme model for supporting refugees into entrepreneurship?
Our model is based on the hypothesis that micro, small and medium enterprises are the key drivers of economic growth and job creation in our communities. This is especially true right now with the COVID pandemic; we’re about to go into an economic downturn, but we know based on previous recessions that it’s going to be the small business community that is the backbone of resurgence.
When we started working with refugee entrepreneurs, we didn’t actually know how many businesses existed in the camps. We ran a small pilot to see if there were even a hundred businesses – what we’ve found over the last four years, after working with more than 12,000 small and micro businesses inside of the refugee camps, is that refugee camps and the surrounding host communities are significantly vibrant.
Our primary services are centered on the core drivers of business growth: better cash and financial management, inventory tracking, and growing a customer base. These skills are vitally important for any business, refugee or not.
In order to help people improve in these core areas, we offer group trainings. We also provide financial tracking tools, tailored for people who have low literacy and numeracy – simple paper-based ledgers that are instructional on how to record sales, expenses, and stock levels. We also have business development advisors – essentially consultants – who work with these businesses at an individual level, to help businesses apply the concepts that they’re learning in our training classes into their day-to-day.
There is also our in-house debt fund; for businesses that need working capital, we can actually provide below market rate loans. We’ve dispersed close to 700 loans to refugees in both Rwanda and Kenya.
How do you recruit refugees into the programme?
Right now, we have about 140 staff across two countries including up to 20 permanent staff based in each refugee camp. They recruit participants through a number of ways.
Before the start of each new cohort, we conduct outreach in close partnership with the local government agency, UNHCR, and other NGO partners. We also speak directly to business owners, asking them how long they’ve been operating, and what support they feel like they need to grow.
In addition, there are formal and informal structures in the camps that we can tap into; there’s a president of the camp who’s elected, a vice president, secretary. You have a whole leadership structure that covers groups of 50-100 households, and sometimes even smaller.
Spreading the word about our programme is actually much easier for us on the refugee side than it is for the other small and medium enterprise programmes that we run. Our people based in the camps can just walk the high streets, pop into a little shops and talk to entrepreneurs, and we also go through some formal and informal savings groups. We use a lot of channels, in a lot of languages, based on our value of being as inclusive as possible.
How are you funded?
Our refugee program is 99% donor funded, and we have a mix of government support, global foundations and smaller family foundations. We also charge interest on our loan fund which covers between 1-5% of our total budget – it’s very small as we want our loans to be affordable for our borrowers.
What differences can you see between the refugee crisis and response in Rwanda/other African nations, compared to Western countries like Germany who have seen a large intake of refugees?
What we see in Africa is that refugees move to nearby countries that might have more peace and stability but are still under-resourced. Refugees are placed in isolated camps, typically on poor quality land that isn’t good for farming, and away from the main arteries of transport. Then humanitarian organizations such as the UNHCR and World Food Programme (WFP) are responsible for providing shelter, education, water, sanitation, food etc. Historically, this resulted in complaints from the people from the local communities that refugees had more resources in the camps than they did! Over the last several years, governments, humanitarian agencies, donors, and NGO partners have been very intentional about providing services to locals in the host communities, and the integration and parity initiatives help lift everyone.
In Rwanda and Kenya, 80 to 85% of refugees live in camps, though there are tens of thousands who live in urban areas. Urban participants in our programme tend to be much more middle class and more educated than the camp residents. They may have been civil servants or entrepreneurs themselves back home, and that’s the profile of refugees that I see living in Europe right now. The majority of people in camps were farmers or worked in the informal sectors back home.
Rwanda is very inclusive because as a country it has a history of being connected to the refugee experience. It’s a country where refugees have a freedom of mobility, the right to work, access to bank accounts, and the ability to start business businesses as a result of very open government policies. The President grew up in a refugee settlement – a leader who has understanding that refugees can be tremendous assets to host countries. Other countries have taken an approach of, “our top priority is offering refugees protection and safe, and don’t have the resources to integrate refugees into our larger national services.”
Why is promoting refugee entrepreneurship so important?
The number of refugees will continue to grow well into the future, especially with climate change and global pandemics likely to cause more instability. Refugee entrepreneurship offers hope for a more sustainable and cost/burden-sharing solution than the previous ways that refugees have been supported for the last 50 years.
Over the last four years we’ve worked with close to 12,000 refugee entrepreneurs. Every single person is an example of the contribution that an individual or family can make to a community, and we advocate opening up government policies and other opportunities for refugees to live contribute and have dignity. 60% of all jobs created by our refugee participants were filled by people in the host community. One of our Board Member’s mothers was personally responsible for leading policies to resettle 130,000 Vietnamese, Cambodian, Laotian people into the US in the 70s and 80s. We can see the economic benefits of those communities in the US economy, be it in our healthcare system, in shrimping and fishing, hospitality – the industries that are keeping the world spinning during the pandemic crisis. The director of our refugee programme has said she hopes this is a turning point whereby Africa can keep the talent of refugees on the continent, and that in another 30 years from now we can see demonstrated economic benefits from housing refugees, rather than expunging them.
How, in your experience, can refugee entrepreneurship promote integration?
Integration makes so much sense from a business perspective – and a human perspective. Refugee camps are really vibrant hubs of economic activity, and if you’re a business owner and don’t speak the language, it just makes business sense to hire someone outside the camp who has local experience. You need a trusted person on the outside who can go and pick up more supplies at fair prices. Several times a year we host community network days where it’s all about facilitating business linkages between refugees and host/local entrepreneurs.
What are some of the major challenges you have faced?
At AEC, we’re very vocal about the fact we don’t think everybody should be an entrepreneur. There can be a subset of people who are running businesses, and when those businesses grow then they can employ others.
But by working with only a subset of people, we often get challenged from humanitarian agencies asking us to do more and support more beneficiaries. I think this is a healthy tension, and it comes from a place of good intentions, but it does mean that we must continue to educate partners on our work how the impact of our services have multiplying effects.
We also get pushback from people with traditional aid-focused mindsets where refugee protection is the top priority. Sometimes our programs are met with scepticism that supporting refugees with a private sector approach means that refugees are being taken advantage of, questioning if promoting business practices is exploitive.
We believe refugees deserve choice, and our entrepreneurship development offering is a sliver of a much larger portfolio of crucial refugee support and interventions. We must continue to be good partners while advocating for inclusive development approaches.
The world can’t afford assistance for another 20 years, and we need to find solutions that are more sustainable. Oftentimes that represents a private sector approach and could mean that not everyone would get access to the same resources, but the benefits of those resources can be felt community-wide.
Do you have any final comments to share with the Refugee Entrepreneurship Network?
I am always so impressed by the number of really smart, committed organizations and people doing this work. This work is way too hard to do it alone, so we are always trying to encourage more organizations to get involved in the refugee space. For example through our partnership with the microfinance lending organisation Kiva, we’re the largest lender to refugee businesses in Sub-Saharan Africa – and that’s with just 700 loans. We find that to be fairly embarrassing. We would be completely happy to share our learnings with anyone who’s interested in doing more or setting up business development services and financing.