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Kenya: Entrepreneurs wanted in the refugee camp

KfW is involved in a fund to promote the private sector

Leban Tahlil stands in a small store in the Kakuma refugee camp and smiles into the camera.
Liban Tahlil answers customers’ questions in this small store in the Kakuma refugee camp.

Kakuma in Kenya is one of the largest and oldest refugee camps in the world. An informal economy has formed around the camp with its approximately 200,000 inhabitants: Kiosks, clothes shops and small traders offer goods. On behalf of the BMZ, KfW supports the Kakuma Kalobeyei Challenge Fund (KKCF) to expand its potential and show new businesses opportunities in this market.

Kiosks, corner shops, cafés and restaurants as well as representatives of the mobile money system M-Pesa to motorbike taxis - a multitude of businesses have established themselves in the Kakuma refugee camp in northwestern Kenya. The camp with its approximately 200,000 residents has existed since 1992 and is supplied by humanitarian organisations. But this support does not fully cover the needs of the refugees. More than 2,000 small businesses have settled in the camp and in the neighbouring villages. The camp is mainly home to refugees from South Sudan and Somalia, but also Congolese and Ethiopians. It can only be reached via dirt roads, yet there is a lively exchange with the surrounding Kenyan communities.

In order to increase the market potential in Kakuma - Kalobeyei, KfW, along with other donors (EU, Swiss Agency for Development and Cooperation, FCDO and the Netherlands), is currently supporting a project of the International Finance Corporation (IFC) to promote the private sector in Kakuma town, the camp and the Kalobeyei settlement with EUR 8.24 million on behalf of the BMZ from the Special Initiative on Refugees.

For this purpose, the IFC has established the Kakuma Kalobeyei Challenge Fund (KKCF) and has entered into a partnership with the African Enterprise Challenge Fund (AECF).

The aim is to support small businesses in Kakuma, to initiate further start-ups and to encourage medium-sized and larger companies to become involved there. The supply situation and the self-reliance of the people in the camp and in the neighbouring communities are to be promoted in this way. The IFC has identified great economic potential in the refugee camp and its surroundings in the study Kakuma as a Marketplace. The project is expected to create 1,000 new jobs and provide 50,000 people with access to improved services, including banking services, access to electricity (mini-grids), telecommunications (mobile phone charging stations), sanitation and childcare. As of today, the KKCF is bringing 13 private and social enterprises to Kakuma and Kalobeyei. These enterprises provide solar power, sanitation, and goods and services for daily needs such as childcare. The largest company is the international pharmacy chain GoodLife, which will open its own branch in Kakuma.

A woman stands at a table and forms dough into bread. Other men and women join in.
Refugee and small business owner Mama Safi Kisasa makes fresh bread in the refugee camp with family members for local schools near Kakuma and Kalobeyei.

The inhabitants will thus become less dependent on aid organisations and the UN Refugee Agency (UNHCR), which in turn has to manage with increasingly scarce financial resources. The project strengthens the private sector and promotes employment and economic power in northwestern Kenya.

Public support for the private sector in refugee contexts is particularly new and innovative. The project thus entails some risks, but also great potential. Among other things, long-standing camps like Kakuma could gain greater autonomy and independence from humanitarian aid through such projects. This is in line with the goal of the New York Declaration of Refugees and Migrants of 19 September 2016 and the Global Compact for Refugees of 2018 to ensure full self-sufficiency of refugees and host communities in the long term. The project fits into the key elements of the Comprehensive Refugee Response Framework (CRRF) by taking pressure off host countries as well as contributing to refugee self-reliance. Long-term perspective: permanent and sustainable support instead of humanitarian aid.

IFC website

Video about the Kakuma Kalobeyei Challenge Fund