www.ifc.org/thoughtleadership NOTE 103 • MAY 2021 Private Sector Initiatives in Forced Displacement Contexts: Constraints and Opportunities for Market-based Approaches By Weiyi Wang, Ozan Cakmak, and Kurt Hagemann The number of forcibly displaced persons has been rising in recent years, and many displacements have become protracted. However, public resources available to assist individuals and families have dwindled, exacerbating already strained situations. Amid this backdrop, private sector initiatives have emerged to help create jobs both for displaced people and their host communities. While market-based approaches in refugee contexts are still new, initiatives in several countries have demonstrated the valuable role that private sector firms and investors can play. This note discusses examples of these market-based initiatives, related challenges, and conflict-sensitive approaches for overcoming these challenges. The note also discusses the important role that development agencies can play in de-risking private sector development through market-creating strategies, partnerships, and blended concessional finance. In recent years, forced displacement has risen to the top of the emergency and protracted refugee situations, the private global development agenda. As of the end of 2020, more than sector can play a critical role in improving refugee and host 80 million people across the world had been forced from their communities’ self-reliance and resilience, through creating homes—the highest level of displacement on record.1 Despite sustainable jobs for FDPs and their host communities, as their limited resources, developing countries host roughly well as through opportunities to start and scale up successful 85 percent of the world’s refugees, 2 and the prospects for businesses. preventing these crises and for refugees returning home remain Private sector development is a new frontier in refugee elusive. In 2019, only 593,800 refugees were able to return to contexts. Although the private sector has a long history of their homes—down from 667,400 refugees who repatriated in engagement in refugee initiatives through philanthropy, 2017—and these results were outpaced by more displacement.3 participation in humanitarian agency supply chains and, more The increasing number, coupled with the protracted nature recently, through corporate social responsibility commitments of many forced displacements, underscores the need not supporting “refugee economies,” has only begun over the last only to prevent and resolve these crises, but also to provide decade. 5 Under this emerging paradigm, whether refugees employment and income generation opportunities for forcibly live in temporary shelters, protracted settlements, or urban displaced persons (FDPs) and their host communities.4 communities, they and their host communities constitute While humanitarian interventions are crucial to addressing markets, and they are economic actors. About the Authors Weiyi Wang, FCS Africa Initiative, IFC. Her email is wwang9@ifc.org. Ozan Cakmak, Partnerships and Multilateral Engagement & FCS/IDA Coordination Unit, IFC. His email is ocakmak@worldbank.org. Kurt Hagemann, FCS/IDA Coordination Unit, Blended Finance, IFC. His email is khagemann@ifc.org. 1 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. A market-based approach to refugee contexts entails This note explores the role of private sector initiatives in recognizing and understanding how refugees “interact with forced displacement contexts. It highlights recent trends, markets as consumers, producers, buyers, sellers, borrowers, key challenges, and factors that facilitate private sector lenders, employers, employees, and entrepreneurs.”6 This engagement and market-based approaches; it explains the differs from, but ultimately complements, the traditional business case for private sector involvement; and it concludes humanitarian response of protecting refugees and meeting with recommendations for private investors and firms that their basic needs for food and shelter. It should be noted, seek engagement in refugee contexts.7 however, that although the private sector can complement government and international agency interventions, it Emergence of Varying Private Sector-led cannot replace them. and Market-based Approaches in Forced Displacement Contexts Initiatives such as the Tent Partnership for Refugees8 BOX 1Moving Beyond Corporate Social have begun to raise awareness and mobilize the business Responsibility: Multinational Corporations community in developed markets to support refugees. Hiring Refugees Through the Tent Partnership, over 130 multinational companies involved in refugee facility management and supply Multinational corporations such as Sodexo, Teleperformance, and IKEA are benefiting refugees and services provision have committed to hiring refugees, by providing them with job opportunities. involving them in supply chains, and providing them with These corporations are hiring refugees in their other forms of support to improve their livelihoods (Box 1).9 core business operations not just as a form of In forced displacement contexts, the private sector ranges from philanthropy, but also based on market-driven principles. In 2019, Sodexo, a facilities management large multinational corporations and local investors, down and food services company, hired 300 refugees to local microenterprises, and includes social enterprises. for its operations globally and the company has Although the creation of jobs by large formal enterprises is committed to hiring 300 more refugees by 2021 well-recognized, in fact most income-earning opportunities in for its operations in Chile, Peru, Colombia, and refugee contexts comprise self-employment and operation of Brazil. Teleperformance, a global business services informal micro, small, and medium enterprises (MSMEs). company, has been hiring refugees in its Colombian operations since 2018, and refugees make up a Private sector actors have a complex array of motives for large portion of the company’s 2,000 recent hires. engaging in forced displacement contexts, and the pathways The retail furniture supplier IKEA has committed for their engagement are diverse too. The three best known to helping at least 2,500 refugees by 2022 through motives for engagement are philanthropy, corporate social supporting their language and job skills training, responsibility, and procurement for humanitarian supply and giving them jobs in 300 IKEA stores in 30 chains. Some private sector engagement is solely profit-driven, countries. In Jordan, IKEA has committed to hiring refugees as well as people in refugees’ however.10 In the case of the latter, businesses may be trying to host communities to work in IKEA’s supply chain. reach new market segments with their products and services, IKEA’s local suppliers have hired 200 refugees and improve last-mile distribution in underserved refugee areas, Jordanians, and IKEA’s store is selling artisanal and diversify their suppliers. Overall, private sector actors goods produced by refugees across the Middle East. have begun to recognize that refugees have diverse skills, For IKEA, Teleperformance, and Sodexo, providing which they can tap to reach the bottom of the economic refugees with these opportunities makes good pyramid and increase the value of their brands; and that business sense because refugees are an untapped source of skills and labor. refugees can provide valuable innovations. Sources: Tent Partnership for Refugees. 2018. “20 Global Companies Across the world, refugees’ living circumstances vary Announce New Commitments to Help Address the Refugee Crisis. https://www.prnewswire.com/news-releases/20-global-companies- considerably. Although it is commonly assumed that refugees announce-new-commitments-to-help-address-the-refugee- live in camps, and most market research and private sector crisis-300717503.html initiatives focus on camps, in fact over 60 percent of refugees Maltz, Gideon. 2019. “Understanding the Venezuelan Refugee Crisis – And How Businesses Can Help.” Global Giving, September 23, 2019. live in urban areas.11 The market dynamics of rural versus https://www.globalgiving.org/learn/listicle/how-businesses-can- urban hosting areas (for example, trade corridors), the profiles help-venezuelan-refugees/ of local business, and refugee-related regulations and policies Tent and Ikea. 2021. Website accessed April 21, 2021. https://www.tent. org/partner/ikea/ may all vary significantly. As refugee contexts vary, initiatives to develop the private sector should vary too. 2 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. Because private sector development in forced displacement restrictions on work in some sectors, and preferences for contexts is still new, further research and pilot interventions hiring nationals.16 are needed to understand the potential impact. IFC’s 2019 Many refugee-hosting countries bar refugees from working Pathways to Scale report, which surveyed over 170 private completely, or only allow them to work in certain occupations sector initiatives in forced displacement contexts, found that and sectors, most of which are not favorable for women. In most efforts were at an early stage, with over half started Jordan, for example, the construction and agriculture sectors within the last decade.12 are major providers of a significant number of jobs for Syrian Most private sector interventions are at an early stage of refugees, but many of these jobs are informal.17 Because exploring differing modalities to see what approaches of such restrictions, many refugees work in the informal would apply to particular refugee camp and urban settings. sector, which puts them at greater risk of exploitation.18 For Opportunities for engagement do exist, but these depend example, in Cox’s Bazar, Bangladesh, where over 900,000 on local conditions, and most can be found in urban Rohingya refugees from Myanmar live, approximately one- areas. However, there are no substantial examples yet third of households engage in some type of income-generating of commercially viable private sector engagements that activity, and this tends to be limited, ad hoc, and small-scale.19 have achieved scale in refugee contexts.13 Seizing these Examples include food stalls and small shops. opportunities requires fully acknowledging the challenges present in refugee hosting contexts. In places where refugees are not allowed to leave the encampment, those who start businesses must rely on Challenges in Maximizing the Impact of the local agents to obtain the goods they need. This raises Private Sector refugees’ costs of doing business. In some countries such as Doing business in refugee contexts requires identifying the Uganda, where refugees are granted the right of movement relevant challenges. These are numerous and fall into four outside of camps and settlements, the interpretation and general categories: (a) policy, legal, and regulatory hurdles; implementation of the policy varies. For example, in order (b) misconceptions; (c) difficult business conditions; and (d) to leave the Rwamwanja settlement, refugees must write a knowledge gaps. These categories are not exhaustive, but they letter in advance that states where they want to go and for illustrate the range of challenges, and identifying the applicable how long, and get approval. 20 ones can help entrepreneurs and investors to identify the risks Even if refugees can operate a business, they cannot own associated with refugee contexts, navigate the bottlenecks property or enter into a contract, which limits their access better, and identify market gaps. to finance. For example, in Kenya, Pakistan, India, and Legal, Regulatory, and Policy Hurdles are the Most Sudan, refugees are barred from owning property, which Significant Barriers to Private Sector Engagement they could use as collateral for a loan. To get around regulations that bar them from owning a business, refugee Both in law and in practice, refugee-related legal, entrepreneurs may partner with a local who can register regulatory, and policy constraints are ranked as the most significant barriers to private investors’ and entrepreneurs’ the business, but this not only increases costs, but also the engagement.14 The most cited policy and regulatory financial and legal risks and the threat of exploitation. barriers are restrictions on refugees’ movement, their right Refugees require official identification to access a wide to work, and their right to start a business. Many refugees range of benefits and services, including social protection, are held back, too, by the difficulties they have in obtaining financial services, and a mobile phone account. Due to their the identification documents they need to formalize their lack of official status and identification papers, would-be status as refugees. entrepreneurs face difficulties opening a bank account, A generally restrictive approach to the right to work for signing a contract, and registering a business. In many cases, refugees exists and governments are usually reluctant to the know-your-customer requirements of mobile network ease such restrictions.15 Notably, refugees’ right to work is operators and financial institutions prevent refugees from governed by official recognition of their status as refugees getting a mobile phone card or opening a bank account. For and their right to protection (key elements of refugee law), example, in Kenya, it can take years after arrival for a refugee and the wider framework of labor and employment law. to obtain an identity card from the National Registration The latter typically governs factors that limit refugees’ labor Bureau, which is the only legal document that allows a access, including work permits, subsidiary employment rights refugee to access public and private services, including mobile related to contractual protection and social service benefits, phone service, and a mobile money account. 21 3 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. Misconceptions May Limit Local Business activities because the handouts, including food, fuel, and other Communities’ Willingness to Do Business in essentials, compete with the products sold by shops in the Refugee Camps and Settlements camps and their host communities. The misconception that FDPs are a burden on the host Protracted displacements result in “lost generations” with country may deter the local business community and limited education. Research shows that education shapes investors from engaging with refugee entrepreneurs. Locals refugees’ economic prospects, and a higher education level may also fear that if they do business with refugees, they correlates with better income-earning opportunities. 25 will face reputational risks and even punishment. While However, refugees who spend most of their lives in camps a sudden influx of refugees can certainly be expensive for usually lack access to higher levels of education. This means the host county, by and large the perception that refugees that businesses that are interested in operating in refugee are a burden is incorrect. Many host communities benefit camps and settlements face difficulties in sourcing adequately from the inflow of humanitarian and development aid educated labor. Additionally, a lack of financial literacy is an triggered by the arrival of refugees, as well as the economic impediment for refugee entrepreneurs. 26 contributions of refugees and their businesses. 22 As a Limited savings and lack of access to finance are major growing number of studies show, there is clear market obstacles for refugees who want to start a business. Due potential for engaging with FDPs. to their lack of work opportunities, refugees usually have Growing analytical evidence suggests that refugees benefit few savings to invest in starting and operating businesses. their host communities. A 2019 study by the Economic Also, refugees lack access to finance due to several Policy Research Foundation of Turkey shows that Syrian factors, including their lack of collateral to guarantee a entrepreneurs have established over 10,000 businesses. loan, the know-your-customer requirements of financial These economically benefit over 250,000 Syrians; they institutions, risk perceptions, and misperceptions about make significant contributions to Turkish foreign trade, profitability. For many refugee entrepreneurs, remittances and they have a positive impact on the Turkish economy. 23 from family overseas is their main source of investment Additionally, a World Bank review of empirical literature on and operating capital. However, the COVID-19 pandemic the impact of forced displacements on their host communities has caused a decline in remittance flows to some refugee- found that over of the course of 17 major crises between hosting countries. This decline in crucial financing, which 1922 and 2015, on aggregate, the impact tended to be is a lifeline for many refugee households, negatively positive: 45 to 52 percent of host community households impacts their businesses too. 27 experienced an increase in well-being, and 34 to 42 percent High levels of informality limit the scalability of refugee of host community households were not significantly businesses. Informality is prevalent in developing economies, impacted. 24 Furthermore, with the right initiatives and but is even higher in refugee settings due to the policy business enabling environment, refugee-driven private and regulatory constraints discussed above. As observed businesses can be a net positive, not just for the forcibly in refugee camps and settlements in Kenya, Ethiopia, and displaced, but also for their host communities. Uganda, refugees’ businesses are usually small, with most having fewer than five employees. Retail businesses are the Challenging Conditions in Host Countries Constrain the Development of Refugees’ Businesses most prevalent type in refugee camps and settlements. They sell items such as food, beverages, clothes, household goods, In Africa and many other regions, emergency camps and and charcoal. These businesses are usually not registered protracted settlements are in remote and peripheral areas, with local authorities and have no physical address, which with limited access to the host country’s economic hubs. affects their ability to do business with medium-to-large These remote locations are due to factors such as proximity to companies and, as already noted, prevents them from refugees’ countries of origin, security considerations, and the accessing loans from financial institutions. availability of land for camps and settlements. As geographic isolation cuts refugees off from the largest markets, their Knowledge Gaps Regarding Investment Information logistics costs are higher and they have less access to the and Business Opportunities in the Refugee Context information needed to successfully operate a business. Within Business communities outside camps and settlements are a host country, the business enabling environment for refugees generally unaware of the opportunities available in refugee and their host communities can vary substantially, too. In settings. Assessing the potential for any business investment addition, humanitarian aid can create barriers to commercial requires detailed knowledge about the market context, 4 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. investment feasibility, competitors, and potential risks—and companies to tap into the diverse talents and skills of information on all of these is generally scarce in frontier refugees who face work and movement restrictions. markets, and especially in refugee contexts. Also, a lack of Internet-based platforms such as Upwork and Freelancer general knowledge, and particularly knowledge about doing allow companies to contract digital work to freelancers all business, is a key challenge for refugees. over the world, including those in refugee camps. Crucial gaps in market and firm-level data are daunting In the refugee camp in Dadaab, Kenya, the recently- barriers to investors seeking market access in refugee- launched Refugee Employment and Skills Initiative, populated areas. Only in recent years have development implemented by the International Trade Centre and the agencies started to conduct in-depth analyses of refugee- Norwegian Refugee Council, trains young people in digital related business potential. IFC’s study, Kakuma as a skills and entrepreneurship, connects them with clients, Marketplace, is the first report of its kind to provide data on and provides them with support to build their careers the market potential in a refugee-populated area. 28 as freelancers.31 NaTakallam in Lebanon hires highly While humanitarian and development-focused data on refugee educated, digitally connected FDPs such as Syrians in areas are plentiful, the business-level data that entrepreneurs Lebanon to provide professional services such as teaching and investors need are lacking. Some of the things that could languages and digital skills. help to unlock much-needed investment for refugee-targeted The increasingly protracted nature of forced enterprises include expanding business-focused data collection displacements, and FDPs’ needs that exceed and using digital technologies to collect data more efficiently humanitarian aid, underscore the importance of in refugee communities. 29 alternative funding models and innovative financing Projects that target refugees and FDPs often have a higher risk tools and structures. These are needed to: i) create long- term, market-based solutions; ii) test, establish, and profile. Reasons for this include the lack of prior investments scale-up sustainable financing models; and iii) design of a similar nature; unproven returns; unappealing risk- bankable projects and programs that can leverage and return ratios; and/or uncertainties about the business model, mobilize private sector resources. the business-enabling environment, and other investment conditions. These risks are exacerbated in lower-income and Cash-Based Interventions Catalyze Private fragile countries. Sector Participation In addition to these challenges, factors that limit private In refugee-hosting areas, cash-based interventions (CBIs) sector interest include the lack of potential for scalability, can play a catalytic role in the transition from an aid- the perceived high-risk profile of participating actors and/ based to a market-based economy. CBIs, which provide or beneficiaries, and the lack of bankable projects. Also, the refugees with cash rather than goods, are not only cost- private sector business opportunities are often at a very early effective, they increase refugees’ purchasing power, lead stage, with no established benchmarks for first-mover risk and to higher demand for goods and services in local markets, rates of return on investment. In these real or perceived high- and attract the local private sector. Conversely, in-kind risk situations, the level of investment risk can exceed the risk assistance such as food and fuel can cause deflation and tolerance of potential partners and investors. lower demand for products in the local economy. CBIs facilitate investment in productive assets and thereby Enablers for Private Sector Solutions generate a positive impact on local economies.32 They Despite the challenging business environment and operational can also encourage key private companies to operate in difficulties, some businesses are able to function in the FDP refugee camps and settlements—for example, financial context. The following section summarizes the lessons institutions such as Equity Bank in Kenya (Box 2).33 learned from these engagements and identifies tools and approaches that can enable greater private sector engagement. In Forced Displacement Contexts, Blended Concessional Finance Can Bridge Critical Financing Technologies and Business Innovations Unlock Gaps and Facilitate Private Sector Entry34 Barriers in Refugee Settings Blended finance35 (the use of relatively small amounts of The combination of technology and business innovations concessional donor funds to mitigate specific investment has the potential to help private enterprises overcome risks) can provide an effective tool to de-risk private sector the constraints of refugee settings. Digital technology investments in FDP contexts. It can also help to rebalance and a growing online “gig economy”30 can enable private the risk-reward profiles of pioneering investments that 5 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. Recommendations BOX 2Equity Bank: Leveraging Cash-based Work closely with local governments and business Interventions to Extend Financial Inclusion organizations (e.g., chambers of commerce) to address to Refugees regulatory and policy reforms. As government policies and Over the past decade, the Kenyan commercial bank regulations can constitute substantial barriers to doing Equity Bank has been adapting its products to business in refugee settlement and hosting areas, firms that increase financial inclusion for low-income people, are interested in doing business or investing should share their including refugees. Beginning in 2010, Equity expertise with policymakers and FDP advocates, and should Bank opened branches in Dadaab and Kakuma, also collaborate to develop policies and regulations that two of the country’s largest refugee settlements, improve the business-enabling environment and encourage which are home to some 380,000 refugees. These branches, which offer financial services to refugees, private sector development and investment. were launched to take advantage of the business To improve their understanding of the local market and opportunities resulting from the switch to cash- business dynamics in refugee areas, private sector actors should based interventions in the camps. Equity Bank, partner with humanitarian and local business organizations. in partnership with the United Nations High This should help them to identify nonfinancial risks; to Commissioner for Refugees (UNHCR) and the World Food Programme (WFP), has facilitated refugees’ understand the local business environment and conflict and use of cash-based assistance by providing them gender issues; and to pinpoint refugees’ needs (e.g., access with debit cards linked to their bank accounts, to key goods and services such as healthcare). All of these into which UNHCR and WFP deposit cash. Equity would help to ensure that business activities are commercially Bank adapted its standard products to the refugee sustainable, they “do no harm,” and are gender inclusive. context to facilitate cash transfers from different UNHCR and other humanitarian organizations already gather humanitarian aid organizations. As a result of and collate data on refugee and host communities, and they operating in refugee and host communities, Equity could share this with private sector actors and advise on the Bank has become even more aware of local needs, regulations, and ways to help. Today, in addition business practices that would help to improve refugee and host to personal bank accounts and debit cards, Equity communities’ self-reliance and resilience. Bank offers refugees access to a range of products To identify market opportunities, private sector actors that include microcredit and group savings and should also partner with the development organizations lending (including loans to both households and that conduct livelihood programs, market studies, and small businesses). diagnostics on the business enabling environment and Source: International Finance Corporation and The Bridgespan Group. 2019. “Private Sector & Refugees: Pathways to Scale.” regulatory frameworks. The availability of a sizable https://www.ifc.org/wps/wcm/connect/1c187356-8185-4efe- consumer market in a refugee camp and its host community, 898c-b78962d30f35/201905-Private-Sector-and-Refugees. pdf?MOD=AJPERES&CVID=mH67q.e. combined with reliable data on the purchasing power of both, could help drive private enterprise development. The private sector could benefit from de-risking tools such would not be viable on strictly commercial terms. With the as blended concessional finance, and other support that right instruments and careful structuring, blended finance development finance institutions such as IFC can provide. can be a critical element in creating markets and increasing In refugee situations, the availability of concessional finance the development impact of private sector-led projects that could help increase private sector financing for innovative target FDPs, and crowd-in private investments in new and and scalable investments such as: access to finance (e.g., challenging markets.36 microfinance and innovative fintech solutions); service Adherence to the DFI Enhanced Principles for Blended delivery (e.g., off-grid energy provision, pay-as-you-go Finance in Private Sector Operations37 is critical in the FDP products, and “willingness-to-pay solutions”); education context. Rigorous application of these principles, which and skills training (e.g., delivering technical education and aim to maximize impact while minimizing potential market training to refugees and host communities); entrepreneurship distortions through the use of concessional resources, and MSMEs (e.g., partnering with microfinance institutions is fundamental to using blended finance in an effective, to scale up lending to MSMEs); and risk-sharing facilities efficient, and transparent manner, and to ensuring the that encourage microfinance institutions to scale up lending sustainability of private sector projects. to very small enterprises). 6 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. De-risking investments with blended concessional finance In conclusion, it is important to note that none of the can demonstrate the commercial viability of solutions approaches discussed in this note are “one-size-fits-all” that benefit refugees and their host communities in the solutions. Creating and fostering private sector opportunities medium-to-longer term.38 With the help of various de- and market-based approaches in forced displacement areas is risking tools that can be applied in the forced displacement highly dependent on the local context, as well as the broader context, private enterprises with blended finance can provide market conditions in the country. Taking both into account comprehensive solutions that: i) meet the immediate basic is critical to strengthening the economic resilience of both needs of refugees; ii) develop refugees’ skills; and iii) provide refugees and their host communities. long-term economic benefits for both host communities and refugees’ countries of origin. Blended finance facilities can ACKNOWLEDGMENTS be combined with donor funds to provide risk capital or seed The authors would like to thank the following colleagues for capital from various contributors to support and strengthen their review and suggestions: Michel Botzung, Manager, FCS strategic investments in MSMEs that have, for example, Africa Initiative, Africa Region, IFC; within the Vice Presidency strong prospects for job creation and/or service provision. Economics and Private Sector Development, IFC: Joanna Kata- Donors, in partnership with governments, impact investors, Blackman, Senior Operations Officer, FCS/IDA Coordination development finance institutions, and multinational Unit, Blended Finance; Jussi Lehmusvaara, Operations companies, could establish platforms that provide patient Officer, New Business and Portfolio, Blended Finance; and capital and technical assistance to MSMEs that are addressing Thomas Rehermann, Senior Economist, Thought Leadership. service delivery and other challenges in refugee settings. Awena Lebeschu, Consultant; Luba Shara, Senior Operations Kenya’s Kakuma Kalobeyei Challenge Fund, for example, Officer; Daniela Henrike Klau Panhans, Consultant, Vishal was established as a partnership between IFC, the Africa Ashvin Patel, Consultant; Gerald Owachi, Consultant; Selma Enterprise Challenge Fund, Turkana County Government, and Rasavac, Senior Operations Officer; and Patrick Luternauer, UNHCR to support private sector investment and unlock the Principal Operations Officer contributed to the Note with their economic potential of refugees and their hosts.39 comments and suggestions. 1 See “Refugee Data Finder” of UNHCR: https://www.unhcr.org/refugee-statistics/ 2 This number includes Venezuelan migrants and refugees. 3 OECD. 2019. “Financing for Refugee Situations.” OECD Development Policy Papers, No. 24, December 2019. https://www.oecd-ilibrary.org/docserver/02d6b022- en.pdf 4 UNHCR defines a protracted refugee situation as “one in which 25,000 or more refugees from the same nationality have been in exile for at least five consecutive years in a given host country”. This definition excludes Palestinian refugees who fall under the United Nations Relief and Work Agency’s mandate. 5 Betts, Alexander, Louise Bloom, Josiah Kaplan, and Naohiko Omata. 2016. “Refugee Economies: Forced Displacement and Development.” Oxford University Press. 6 Betts, Alexander, et al. 2016. 7 Two major IFC publications, “Private Sector & Refugees: Pathways to Scale” and “Kakuma as a Marketplace,” plus a growing body of knowledge on market-based approaches and the private sector’s role in creating jobs and livelihoods for FDPs and their host communities, played an instrumental role in completing this Note. 8 See https://www.tent.org/ 9 Tent News. 2021. “New Impact Sourcing Initiative Will Help Integrate Venezuelan Refugees in Colombia’s Workforce.” https://www.tent.org/tent-news/press- release-colombia-bpo-impact-sourcing/ 10 Tent News. 2021. 11 Ijjasz-Vasquez, Ede, Soraya Gaga, and Ellen Hamilton. 2019. “Refugees and Internally Displaced Persons in Cities – The ‘Hidden’ Side of Forced Displacement.” World Bank Blogs. https://blogs.worldbank.org/sustainablecities/refugees-and-internally-displaced-persons-cities-hidden-side-forced-displacement 12 IFC and Bridgespan Group. 2019. “Private Sector & Refugees: Pathways to Scale.” https://www.ifc.org/wps/wcm/connect/region__ext_content/ifc_external_ corporate_site/sub-saharan+africa/resources/psr-pathways-to-scale 13 IFC and Bridgespan Group. 2019. 14 IFC and Bridgespan Group. 2019. 15 Zetter, Roger, and Héloïse Ruaudel. 2016. “Refugees’ Right to Work and Access to Labor Markets – An Assessment.” Washington, DC: Global Knowledge Partnership on Migration and Development (KNOMAD), September 2016. https://www.knomad.org/publication/refugees-right-work-and-access-labor-markets- assessment-part-1 16 Setter, Rogher et al. 2016. 17 Huang, Cindy and Gough, Kate. 2019. “The Jordan Compact: Three Years on, Where Do We Stand?”, Center for Global Development, 2019. 18 Huang, City, et al. 2019. 7 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. 19 IRC (International Rescue Committee). 2019. “Left in Limbo – The Case for Economic Empowerment of Refugees and Host Communities in Cox’s Bazar, Bangladesh.” September 18, 2019. https://reliefweb.int/report/bangladesh/left-limbo-case-economic-empowerment-refugees-and-host-communities-cox-s-bazar 20 Betts, Alexander, et al. 2016. 21 GSMA. 2017. “Refugees and Identity: Considerations for Mobile-Enabled Registration and Aid Delivery.” GSMA, 20 July 2017. https://www.gsma.com/ mobilefordevelopment/resources/refugees-and-identity/ 22 A 2017 study by Building Markets found that 76 percent of Syrian business owners plan to keep their businesses in Turkey even after the war ends, and they can move back to Syria. Building Markets. 2017. “Another Side to the Story: A Market Assessment of Syrian Refugees in Turkey”. New York: Building Markets. https://www. buildingmarkets.org/sites/default/files/pdm_reports/another_side_to_the_story_a_market_assessment_of_syrian_smes_in_turkey.pdf 23 TEPAV and EBRD (European Bank for Reconstruction and Development). 2019. “Syrian Entrepreneurship and Refugee Start-ups in Turkey: Leveraging the Turkish Experience”. Ankara: TEPAV. https://www.tepav.org.tr/en/haberler/s/10023 24 Verme, Paolo, and Kirsten Schuettler. 2019. “The Impact of Forced Displacement on Host Communities.” Washington, DC: World Bank. https://openknowledge. worldbank.org/bitstream/handle/10986/31231/WPS8727.pdf 25 Betts, Alexander, et al. 2016. 26 IFC 2018. “Kakuma as a Marketplace: A Consumer and Market Study of a Refugee Camp and Town in Northwest Kenya.” April 2018. Washington, DC: International Finance Corporation. https://www.ifc.org/wps/wcm/connect/0f3e93fb-35dc-4a80-a955-6a7028d0f77f/20180427_Kakuma-as-a-Marketplace_ v1.pdf?MOD=AJPERES&CVID=mc8eL2K 27 World Bank. 2020. “World Bank Predicts Sharpest Decline of Remittances in Recent History.” Press Release, 22 April 2020. Washington, DC: World Bank. https:// www.worldbank.org/en/news/press-release/2020/04/22/world-bank-predicts-sharpest-decline-of-remittances-in-recent-history 28 Other recent refugee-focused market studies include: UNHCR (United Nations Refugee Agency) and ILO (International Labour Organization). 2019. “Doing Business in Dadaab Report: Market Systems Analysis for Local Economic Development in Dadaab, Kenya”. Geneva: International Labour Organization; and ILO (International Labour Organization). 2018. “Market Systems Analysis for Refugee Livelihoods in Jigjiga – Ethiopia”. Geneva: International Labour Organization. 29 World Economic Forum. 2021. “Unlocking Humanitarian and Resilience: Investing through Better Data.” Geneva: World Economic Forum. https://www.weforum.org/ whitepapers/unlocking-humanitarian-and-resilience-investing-through-better-data 30 Valerio De Stefano (2016) defines the gig economy as “labour-market activities that are coordinated via mobile platforms, which are increasingly bringing together workers and purchasers of their services locally and globally.” The operating model of gig economy platforms can be divided into “crowd work” and “on-demand” work. Crowd work refers to tasks that are commissioned and carried out via the internet using suitably skilled “crowd workers” located anywhere in the world. On- demand tasks are carried out locally, based on close physical proximity of both the service purchaser and the provider. De Stefano, Valerio. 2016. “The Rise of the ‘Just-in-Time Workforce’: on-Demand Work, Crowd Work and Labour Protection in the ‘Gig-Economy”, Condition of Work and Employment Series No. 71, International Labour Organization. 31 ITC News. 2020. “Entering the Global Gig Economy from Dadaab Refugee Camp.” June 24, 2020. Geneva: International Trade Centre. https://www.intracen.org/ news/Entering-the-global-gig-economy-from-Dadaab-refugee-camp/ 32 Overseas Development Institute. 2015. “Doing Cash Differently: How Cash Transfers Can Transform Humanitarian Aid.” Report of the High-Level Panel on Humanitarian Cash Transfers, September 2015. London: Overseas Development Institute. https://cdn.odi.org/media/documents/9828.pdf 33 IFC and Bridgespan Group. 2019. “Private Sector & Refugees: Pathways to Scale.” Washington, DC: International Finance Corporation. https://www.ifc.org/wps/ wcm/connect/1c187356-8185-4efe-898c-b78962d30f35/201905-Private-Sector-and-Refugees.pdf?MOD=AJPERES&CVID=mH67q.e 34 See IFC (International Finance Corporation). 2021. “Using Blended Concessional Finance to Invest in Challenging Markets—Economic Considerations, Transparency, Governance, and Lessons of Experience”. February 2021.Washington, DC: International Finance Corporation. 35 Definition of blended concessional finance: combining concessional finance from donors or third parties, alongside development finance institutions’ normal, own account finance and/or commercial finance from other investors, to develop private sector markets, address the Sustainable Development Goals, and mobilize private resources. For more information on blended finance, see the International Finance Corporation’s website. https://www.ifc.org/wps/wcm/connect/Topics_ Ext_Content/IFC_External_Corporate_Site/BF/ 36 The blended finance-related portions of this paper were authored by Jussi Tapio Lehmusvaara, Blended Finance Department, International Finance Corporation, Washington, DC. His email is jlehmusvaara@ifc.org. 37 The DFI Enhanced Blended Concessional Finance Principles for Private Sector Projects can be found here: https://www.ifc.org/wps/wcm/connect/topics_ext_ content/ifc_external_corporate_site/bf/bf-details/bf-dfi 38 Developed by FMO, the Netherlands’ entrepreneurial development bank, in partnership with the European Commission, “NASIRA is an innovative financial program that supports young, female, and migrant entrepreneurs in Sub-Saharan Africa and countries neighboring Europe. NASIRA uses guarantees to allow local banks to on-lend to underserved entrepreneurs. It targets portfolios consisting of loans to young, female, and migrant entrepreneurs (including refugees, returnees and internally displaced people). The goal of these guarantees is to allow local banks to provide loans to groups they normally perceive as too risky. By so-called ‘risk- sharing’ NASIRA reduces the perceived and real risks of lending to vulnerable and underserved parts of the population. It enables and stimulates financing needed for people who want to grow their (micro) business.” Source: http://www.nasira.info/ 39 See website of the Kakuma Kalobeyei Challenge Fund (KKCF): https://kkcfke.org/ 8 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group.