The development community is increasingly working to empower refugees as agents of their own lives and economic contributors, e.g. by providing skills training, offering employment or enabling access to financial products and services. Private sector actors are well positioned to enhance and scale these efforts, given their strategic capabilities and business models. This report presents research on 173 early-stage private sector initiatives that engage refugee and host communities. Many originate in host countries where there is an enabling policy environment, i.e. where refugees can participate in economic activities, and are offered opportunities for income-generation and education. The researchers also undertook a survey on actors’ motivations, the barriers they face, and their outlook on future engagement.
The research identifies five common ‘pathways of private sector engagement’ beyond funding humanitarian assistance, and includes five case studies illustrating how a specific private sector actor explored, evaluated, and approached one of the five pathways to engaging refugees and host communities. The research also identified several barriers to growth and scale, including insufficient tools and information to engage refugees and inadequate coordination across stakeholders. The five pathways to private sector engagement are:
- Sharing capabilities (e.g. technology or technical expertise) to provide access to humanitarian assistance, education, or financial service, e.g. IrisGuard’s iris recognition technology has streamlined the process of registering and delivering services to refugees in Jordan and elsewhere. Refugees no longer have to wait at distribution points, are less susceptible to theft and corruption, and have more agency in how they receive assistance.
- Extending services by adapting current business models to sell goods/services to refugees, e.g. Equity Bank provides banking products and services to thousands of refugees in Northern Kenya.
- Enabling employment by providing job training and/or entrepreneurship support to refugees, e.g. Luminus Education is Jordan’s first private institute to provide employment training for refugee youth. 70-80 percent of Luminus’s refugee students find employment—and in some sectors, like hospitality, all of them do.
- Integrating into value chains by hiring refugees directly and/or working with smaller enterprises that hire refugees through sourcing or subcontracting work, e.g. Sanivation is using an innovative approach to bring more hygienic sanitation solutions and cleaner fuel alternatives to refugee communities in Kenya, while also providing a range of employment opportunities, from manufacturing to sales.
- Building a business through the selling of goods and services tailored to refugee populations, e.g. Inyenyeri’s innovative cooking system is addressing cooking needs, household air pollution, and fuel efficiency issues in refugee homes in Rwanda. This affordable, market-based solution aims to reach 3,500 households in Kigeme Camp and start expanding into several other camps in 2019.
The researchers also undertook a deeper analysis of 110 initiatives across Africa and the Middle East and identified three factors that are critical for impact and scale:
- Flexible financing: Venture capital-like approaches to funding, with smaller, more flexible, and need-based investments—even within the existing pool of capital—can better enable testing and scaling for the early-stage, innovative, yet unproven initiatives that comprise much of the landscape and pipeline of work with refugees.
- Cross-sector partnerships: Given its scope and multifaceted nature, addressing refugee needs requires collaboration across the government, humanitarian, NGO, private, and development finance sectors.
- Investment information: Increasing the information flow on refugee qualifications, needs and preferences, local context, and existing efforts can ensure informed decisions by all private sector actors—especially those without the resources or connections to access such information themselves.