Challenge:Current aid-funded livelihoods interventions in displacement-affected humanitarian contexts are not effective because they target inefficient micro-enterprises.Entrepreneurs who have been forced to leave their place of origin because of war or natural disasters find it difficult to establish efficient business partnerships in their place of displacement. This is because they cannot rely on effective regulatory systems and institutions that ensure a level playing field, equal access to information and coordination.In their place of origin, entrepreneurs would rely on their network of trusted individuals. However, following displacement they have lost their networks and do not have the capacity to navigate through the systems of their place of displacement, especially if institutions are weak and systems unpredictable.Aid agencies have sought to address this problem by circumventing it. As the context does not favour the emergence of efficient enterprises that can generate decent returns, aid agencies have decided to support unemployed displaced labourers to become entrepreneurs. This approach can be effective when displacement is temporary, as it provides a short-term injection of capital and skills. However, it has shown its limitations in case of protracted displacement, as short-term injection of income may not be enough to make displaced individuals economically integrated in their host societies.
Solution:Create a platform that provides displaced entrepreneurs with access to information, a level playing field, and enforcement mechanisms, so that they can enter into business partnerships with other entrepreneurs, knowing that all parties will abide by the rules.
Although the platform is based on the principle of crowdfunding, it differs from other crowdfunding platforms that rely on effective institutions for businesses to function.The platform will provide the rules, accountability and transparency needed by business partnerships to emerge. Entrepreneurs will use the platform to promote a business idea with investors and business partners. The platform will disclose information on how the business is being run, including detailed financial information on the company bank account, investments, inventories, staffing, procurement etc. This level of transparency will give investors and business partners the possibility to take informed decisions about their investments in their chosen companies.
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