Empowering refugee communities through entrepreneurship

Problem

Political conflicts, violence and climate disasters are forcing a growing number of people to flee their homes. Today, there are over 122 million forcibly displaced persons (FDPs) worldwide — a crisis that’s expected to grow in the coming years. As the number of displaced persons grows and aid budgets decline, the current system — designed for short-term displacement — is reaching a breaking point. Refugee camps are often in harsh, remote regions, within host countries that are struggling with their own political and economic challenges. As such, FDPs rely heavily on humanitarian aid, like rations and subsistence cash handouts. As displacement periods lengthen, these temporary supports unintentionally keep FDPs in a perpetual state of poverty and dependence. They live in a state of limbo, often lasting decades, where they are disconnected from their homes, have few pathways to safe resettlement and are excluded from the communities, markets and economies in their new region. 

Big Idea

In any FDP population, there are innovators and entrepreneurs with grit and resourcefulness, who have the solutions to their communities’ needs. These are high-potential individuals, capable of growing small businesses that can drive economic growth for themselves and their communities. While the current aid system is focused on providing basic necessities like food and shelter, Inkomoko thinks longer-term and works to support these entrepreneurs with financial backing, business training and economic integration into the local community. With the right supports, FDP entrepreneurs are able to build their businesses, generating meaningful income for their families while creating new jobs for others in their communities too. By 2030, Inkomoko will reach 335,000 FDP and local entrepreneurs in Ethiopia, Kenya and South Sudan, positively impacting the lives of 4 million people in these countries. All while demonstrating a durable pathway out of poverty for millions of FDPs worldwide. 

Plan

Many FDPs had a business before being displaced that they’d like to rebuild; others have started a business they’d like to grow; still others have a business idea worth starting. Inkomoko’s work begins by identifying these individuals. They use a cohort system, with clients that include FDP entrepreneurs as well entrepreneurs from local communities, to bridge the divide and create a strong economic environment in the region that benefits all. Each cohort receives skills training, as well as individualized coaching. And for businesses that need growth capital, Inkomoko provides flexible financing options that are well below market rate. Tying the work together, Inkomoko connects their clients to larger markets and national supply chains, so their businesses can continue to grow. As the final step, they advocate with governments for FDPs to receive equal rights and with banks to make the business case for economic inclusion.

Why will it Succeed?

Inkomoko was founded in 2012 to help local entrepreneurs access the skills, financing and markets they need to thrive. They have served 60,000 FDP and local entrepreneurs across East Africa — and established themselves as Africa’s largest FDP and refugee lender. Their clients report a dramatic increase in income, with the average business experiencing 70% average revenue growth in the first six months of support. Inkomoko’s clients run general stores and restaurants, sell clothing and fabrics, and manufacture small goods like soaps and tools; they run small farms, provide transportation and operate mobile money operations. With a 96% loan repayment rate, Inkomoko is proving that displacement-affected communities are as investable as any other and showing the world that market solutions are, of course, an option for refugees and displaced persons.