As refugees look to rebuild, entrepreneurship can offer a path forward

A market stall holder in Uganda, where years of conflict have displaced hundreds thousands of people. TechnoServe and MasterCard Foundation train rural youths to become successful entrepreneurs in conflict-affected countries like Uganda in an effort to support the emergence of small businesses. Photo by: Pete Lewis / Department for International Development / CC BY

As the migrant crisis unfolds across Europe, the dialogue has focused on the challenges it creates, but as the conversation shifts to livelihoods and integration it should consider the creative drive that the displaced bring with them. Pushed from their homes under dire, often horrific, circumstances, they are inherently forced to reinvent or adapt their livelihoods to their new situations.

Some are able to channel those creative and adaptive skills into starting a new business but it is not easy. Entrepreneurs often need help to get the initial spark necessary to help launch their small businesses.  

In countries decimated by conflict and war, the task is multiplied. Formal employment opportunities are often limited, leaving small startup businesses to fill the void. But traditional bases of early business support — banks, associations, consultancies — are often either too weak or absent in fragile, conflict-affected states. Many potential entrepreneurs lack a conventional commercial skillset to expand their reach.

For the past four years TechnoServe, an international nongovernmental organization has been partnering with the MasterCard Foundation on a program that trains rural youths in business in an effort to support the emergence of small businesses. The STRYDE program — Strengthening Rural Youth Development through Enterprise — is a mini-MBA of sorts launched in 2011 with the purpose of equipping young adults between the ages of 18 and 30 with the tools and skills necessary to expand their economic opportunities.

Sub-Saharan Africa has one of the youngest and fastest-growing populations in the world, which makes it a ripe environment for skills training programs such as STRYDE. From 2000 to 2008, roughly 1 out of every 3 new jobs created in the region was for people between the ages of 15 and 24. But with around 10 million to 12 million youths entering the labor market every year, the growing size of the workforce far outpaces the number of new jobs opening up.

In its first four years the STRYDE program worked to train over 15,000 youths in Kenya, Uganda and Rwanda in general business practices such as budgeting, money management, record keeping, pricing and accounting. Now in its second phase, STRYDE has added Tanzania and parts of northern Uganda into its trainings. It aims to scale up to 48,000 new youths over the next five years.

Though not directly designed as a program for migrants or conflict resolution, its involvement with conflict-affected communities from northern and central Uganda has made STRYDE a platform for refugees and the internally displaced to achieve a relative sense of normalcy and financial stability through entrepreneurship. 

While all participating countries are beset by high levels of poverty and low formal employment, Uganda is the only country that STRYDE officially classifies as “post-conflict.” Ravaged by a protracted civil conflict between the central government and brutal rebel militant groups such as the Lord’s Resistance Army, Uganda had the second highest number of participants in the program’s first four years. Over the next five years about a quarter of anticipated participants will be from Uganda.

“We are very conscious of the psychological impact of the conflict,” said Dash Douglas, a STRYDE director with Technoserve. “With the amount of bitterness and idleness that stews, the heart of the benefit of this is giving them something positive they can do in their lives and also be able to make enough money to take care of their families.”

Christine Acan, a 25-year old STRYDE participant, fled her village in northern Uganda in 2001 after she was abducted by rebels and forced to kill her brother. She now runs her own bakery and credits her experience in the program for giving her the specialized skills that have allowed her to pay for schooling for her brothers and two children.

There are many similar stories — of both the horrors of war and the emergence of entrepreneurial ventures. Other STRYDE startups include salons, barber shops, clothing stores and cafes.

As a result, participants have more than tripled their income, increasing their earnings from a minimum wage of about $27 per month to $91 per month. And importantly, a key component of the program has been to boost savings. TechnoServe says that approximately 70 percent of STRYDE alumni are now saving money, compared with 10 percent before they entered the program.

In the rural parts of northern Uganda programs such as STRYDE are effectively building a small-scale economy from the ground up.

“We’ve done a good job of combining skills that young people have with market actors and where there’s demand,” said Steve Cumming of the MasterCard Foundation, which funds the program. It has teamed up with local institutions to assist with trainings and conduct outreach. Partner institutions include vocational training institutes, student associations at local universities, various NGOs with similar youth empowerment missions and even two prisons in Kenya.

The various partnerships have joined to form a network of business support that complements the development priorities of host country governments.

The progress so far of building a base of entrepreneurs has also come with some rather typical challenges. Like many startup businesses, STRYDE entrepreneurs are burdened at the onset by the lack of access to finance.

“[The business owners] are vulnerable, have little education, very few have ever had consistent income and they have no collateral,” said Douglas. “They are a risky group in general.”

Government and competitively-awarded TechnoServe grants can provide modest early capital. Generally, however, most small businesses that emerge from STRYDE can be started with very little money, said Douglas. “They just have to start smaller and slower,” he added.

Another challenge, Douglas said, is that the small number of program graduates who choose to enter into formal employment often find that their skills are not a good match for what employers want.

The focus for STRYDE going forward is on scale and sustainability. With the number of youth participants projected to triple from its original 15,000, around 40 percent will be trained by partner organizations. That will require adding new institutions and strengthening training operations to ensure sustainability at the end of the five-year program independently from TechnoServe and the MasterCard Foundation.

Business skills programs such as a STRYDE have indeed changed lives by empowering the victims of conflict and helping them become small business owners. Like most small ventures they face the initial hurdles of obtaining finance and sustaining their model beyond the short term and many of them may not succeed in the long term.

“But reengaging life, re-engaging the economy and other folks who are heading down this track is also a positive route,” said Douglas. 

As refugees and migrants find new places to live, or if stability returns, head back to their former homes, entrepreneurship can play an important role in allowing them to support their families and build local economies. It’s not the solution alone, but it can be an important part of the recovery process.

Technoserve and the Mastercard Foundation are not the only ones that have recognized the potential of entrepreneurship. Earlier this summer the government of Uganda, the UN refugee agency and Nobel laureate Muhammad Yunus signed a memorandum of understanding, which they deemed the first of its kind, agreeing to work together to tap the innate entrepreneurship in refugees in Uganda and move them towards self-reliance.

If some of these efforts prove successful there may well be more of these programs working to use entrepreneurship as a tool for development — especially among refugees or in post-conflict settings in the years ahead.

Conflict in Context is a monthlong global conversation on conflict, transition and recovery hosted by Devex in partnership with Chemonics, Cordaid, Mercy Corps, OSCE and USAID. We’ll decode the challenges and highlight the opportunities countries face while in crisis and what the development community is doing to respond. Visit the campaign site and join the conversation using #ConflictinContext.

About the author

  • Naki mendoza 400x400

    Naki B. Mendoza

    Naki is a former reporter, he covered the intersection of business and international development. Prior to Devex he was a Latin America reporter for Energy Intelligence covering corporate investments and political risks in the region’s energy sector. His previous assignments abroad have posted him throughout Europe, South America, and Australia.