Providing refugees

1
Providing refugees asylum seekers with
micro-capital for business start-ups a case
study from Cape Town

• Kathryn Hoeflich, Director, CTRC
• Contributors Phaladi Kotsie, Julien Verzier,
  Lucy Doggett
• 10 February 2014

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Overview

• Introduction to the Self-Reliance Programme
• A Few Case Studies
• Challenges Lessons Learned

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Introduction CTRCs Self Reliance Programme

• CTRC supportive services for emergency/social
  assistance, self-reliance social cohesion
• Funded primarily by United Nations High
  Commissioner for Refugees
• Self-Reliance Programme
• South African Qualifications Authority assistance
• (Formerly) Vocational Training Programme
• Micro-business Grants
• (New) Entrepreneurship Business Skills Training
• Various workshops, cooperatives, etc.

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Introduction Self Reliance Programme

• Types of businesses supported
• Sewing
• Fish-Drying
• Informal Trading (Hawking) cigarettes, sweets,
  chips, etc.
• Hair Salon (Saloon)
• Driving
• Upholstery, Tiling, Carpentry other
  home-improvement
• Small-plot farming
• Refrigeration, Welding, Air-Con repair, etc.
• 2006 2013 450 grants of total value R885,000
• Grant size R500-5,000 (US50 - 500) per person
• Source for data for cases less than 50 could be
  contacted, excuses, false addresses 25
  contactable

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Case 1 Archibald

• Supported in 2008 to obtain driving license
  through vocational training budget then some
  seed funds through micro-grant R3,200 total
  investment by CTRC
• Employs 2 South Africans (seasonal flux)
• Runs 2 businesses profit passion
• Owns his own tools re-invests
• Major constraint access to loans for business
  expansion

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Case 2 Matilda

• Elderly woman assisted
• in 2007 with R2,949
• (2 domestic machines
• material
• Xenophobic attacks in 2008
• left everything when she fled shack machines
  protected by street committee
• Now exports duvets to Namibia, large orders for
  local churches, focus on quality customer
  service
• Employs 4 employees (locals Zimbabweans)
• What sets her apart community relations

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Case 3 Fish-Drying Group

• 5 women from DRC working together ad hoc for 2
  years 2010 assist with R16,500 total for small
  fridge fish-drying machine
• Constraints
• Took over 1 year to get assistance from CTRC
• Pooling of funds maximizes equipment, but no
  group-dynamics assistance
• Low capacity fridge, electricity cuts means
  spoiled fish
• Once-off assistance policy
• Change of location, break-in break-up

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Case 4 Blind Weavers Group

• 10 blind skilled weavers their guides
• Negotiation with Blind Institute for up-skilling
  high-quality material
• 1 year of negotiations offer to provide free 1
  month training R50,000 for business start up
  location material, negotiations broke down
• They make more money begging on streets trains

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What is Success?

• Defining success as limited failure or barely
  breaking even
• Of contactable individuals, 76 still running
  businesses
• Of 76, only 50 feel self-sufficient
• Focus on short-term survival vs. long-term growth
  is major constraint
• Selling the capital goods when times get tough

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Challenges Lessons Learned

• Non-alignment of skills
• Plenty of skills (teachers, engineers, nurses,
  economists) but they choose running a
  micro-business because formal economy is nearly
  impossible with Section 22 asylum seekers permit
• Little-to-no business or entrepreneurial skills
• Selling chips on a block where everyone else has
  the same
• Soft-skills, motivation, passion/interest set
  the truly successful apart from those who
  struggle
• Community Relations
• Violent Xenophobia, Business Xenophobia,
  general violence, attitudinal xenophobia
• Local language, local knowledge, social
  membership
• Clustering or limiting to same nationality

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Challenges Lessons Learned - 2

• Structural Challenges
• Police harassment
• Policy, by-laws, legislation practice
• Lending micro-finance institutions
• Challenges with CTRCs programme
• Constrained
• too little funding per person vs demand makes
  each grant smaller
• No loans
• No repeats
• Lengthy process with too many steps
• No business training for beneficiaries (fixed in
  2012/2013)
• Not enough follow-up or monitoring
• Over-coming hand-out mentality