Business hubs provide modern premises for refugee enterprises

The opening of two new business hubs is set to boost entrepreneurial activity in the Rwandan refugee camps of Gihembe and Nyabiheke. The newly built hubs are part of the Renewable Energy for Refugees (RE4R) project which is increasing energy access in the camps for refugees engaged in small-scale economic activities. The hubs will not only allow entrepreneurs to power larger appliances through reliable grid connections in a safe and well-constructed building, they will also help refugees expand businesses currently constrained by lack of space. Each hub is expected to accommodate 14 businesses including tailors, cyber cafés, drycleaners, photocopying and printing, refrigeration, phone repair, milk cooling, canteens and restaurants, welding and carpentry. 

Funded by the IKEA Foundation and Delivered by UNHCR, the UN Refugee Agency, and Practical Action in partnership with Energy 4 Impact, RE4R enables energy access for households, small enterprises, institutions and community facilities, as well as fostering job creation and income generation for displaced populations and their host communities.  Between September 2019 and December 2020, Energy 4 impact provided support to refugee enterprises across three camps in Gihembe, Nyabiheke and Kigeme.

The two new grid-connected hubs will help overcome the logistical constraints faced by many businesses in the camps and accelerate entrepreneurial activity. Up until now, despite the location of the camps in grid-connected areas, only institutions such as schools, health centres and administrative offices could access grid electricity. Whilst RE4R has so far enabled many refugee businesses to power lighting, machinery and tools with solar home systems, larger appliances often require grid electricity to operate. As enterprises are also run out of households, a lack of space typically prevents refugees from expanding their operations. “I have run my business from home for the last 10 years,” says shoe seller Evariste Ntireganya. “I don’t have room to set up a boutique for my customers so the growth of my business has been hindered.’’

Whether through the grid or renewable energy sources, energy access is vital for business expansion in the camps. Through the RE4R programme, 70 enterprises have been supported to access energy and acquire appliances since September 2019. Fifteen months later, a total of 44 enterprises had increased their profit margins by more than 50%.  The increased turnover has enabled entrepreneurs to improve their household living standards whilst also giving them the chance to reinvest in stock and capitalize sidelines such as vegetable growing. It has also enabled them to hire more staff: the total number of permanent and temporary employees within the supported enterprises grew from 298 in September 2019 to 374 in December 2020, representing a growth rate of 32%.

For example, Odette Murebwayire operates a butcher in the Kigeme host community, supplying meat, meat pies and filled pastries to local restaurants. In January 2020, RE4R helped Odette access capital in order to procure a meat grinder, electric weighing scale and meat freezer, whilst also offering business management training in areas such as recording keeping, customer care, marketing, appliance maintenance, and health and safety standards. Murebwayire says that this support marked a turning point for her business:

The business hubs will now allow even more refugee enterprises to increase their profit margins as the newly available energy access enables appliance usage. Complete with reliable connections to the national grid, each single-level concrete-built hub will provide a bespoke 10-room business centre.

Given some appliances are costly and require more electricity, the hubs will enable similar businesses to share equipment and so make them more affordable. 

Working alongside other businesses in the hubs will also help foster entrepreneurialism in refugees and so promote a sense of self-reliance. It is therefore envisaged that the hubs will spur the capability of refugees to make enough money of their own to meet their educational, health, food and shelter needs.