Djibouti – LWF supports Small Businesses to Help Break Dependence in Djibouti Camp

Written by Melany Markham, LWF Kenya/Djibouti program

ALI ADDEH, Djibouti/GENEVA, 27 October 2011 (LWI) The vibrancy of the main street in the Ali Addeh refugee camp makes up for its short length.

Clothing shops, grocers, restaurants and even a butcher are housed in wooden shacks, staffed by owners eager to make money.

It’s mid-morning and in at least two of the restaurants, brightly-clad, smiling women are preparing lunch for customers’ arrival in a couple of hours.

Those who enter the restaurant enjoy at least one cup of tea from the large pot on a charcoal burner just outside.

Women with businesses in Ali Addeh can thank the income-generation program run by The Lutheran World Federation (LWF), a member of the ACT Alliance, with funding from the United Nations High Commissioner for Refugees (UNHCR).

The program began in 2009 and, since then, almost 200 people at the camp some 150 kilometers south of Djibouti-Ville, the capital of Djibouti, have received livelihood grants.

Before the program started girls were dropping out of school as their families sent them to Djibouti-Ville to earn money. Other families did not have enough food.

The UNHCR assessed a need for income sources that promote self-reliance rather than dependence.

Success Stories

Fatima Ahmed works in one of the loan-funded restaurants. She prepares the lunchtime meal, surrounded by her five daughters.

Fatima - Fatima Ahmed runs a small restaurant in Ali Addeh refugee camp, Djibouti. She started the business with a loan from an income generation program managed by the Lutheran World Federation. The profits from the business feed her family and save USD30 per month. (c) Melany Markham/LWF 2011


The business started 18 months ago and she will pay off the loan by December. She feeds her family and manages to save USD 28 a month. When asked if her husband is employed, she smiles and says he works for her.

Abdi Awol Hassan and Mohamed Abdi Yazeem, both refugees, have helped administer the program since it started. They help chase repayments, resolving disputes, and will tell you that Somalis have a keen business sense.

The most successful group has created five businesses from a loan equivalent to almost USD 800, but the program contributes more than just economically.

One business is a large tent with a television at one end–a movie theatre. At night, paying customers watch films and play games offering both a source of income and more liveliness to camp life.

Still, a bustling main street has brought challenges, says Vitalice Ochieng, a Kenyan who coordinates the program at the camp housing some 14,000 refugees, most of whom have fled war and hunger in Somalia.

“In microfinance, time is needed to get to know people. It’s not like a formal bank where people are bound by the rules. They must believe in your idea first of all and then you must work with people who are hardworking and that you can trust,” says Ochieng.

He also needs to get people to understand why they should repay the money, explaining it can only be given to those few people who deserve it.

“A refugee camp is like any other society. There are those who are honest and some, who after receiving the money, then left the camp,” he said.

The main street of Ali Addeh refugee camp, Djibouti (c) Melany Markham/LWF 2011

Improving the Program

Since a review in August, Ochieng and his team are improving the program. One idea is that the LWF will not give the refugees money directly.

Instead, says Ochieng, “If they want to buy goats, they tell us where to buy them and we will purchase them from that vendor.”

The LWF is also establishing a community committee to whom they will delegate some of the responsibility so they can do specific tasks.

“We want them to own this project and to feel responsibility when someone does not pay,” says Ochieng.

Some of the women who have been in the program since 2010 and have repaid their loans are highly regarded.

“They are people who can openly come to us and vouch for others,’ says Ochieng.  “These people will form the committee and will help us select beneficiaries.”

Business Planning

Along with their application, refugees have to submit a budget and a small plan. The LWF provides a simple template that is similar to business plans anywhere.

The first questions it asks are, “What is your target market?””How will you advertise?” “How will you set prices?” The business plan is in Somali and, as most people in the camp speak it, in English.

Even so, most of the beneficiaries are illiterate, so income generation assistants, who are educated refugees, are recruited to help them.

At one time, there were some who thought the program disbursed a lot of money. However, the cost of doing business in Djibouti is high.

Stock must be purchased from Djibouti-Ville and the fare costs USD 11. There is also the wait for the arrival of a lorry.

Ochieng says, “Doing business here is not for the faint hearted; it’s a challenge.”

Regardless, hard work has changed some groups’ lives. One woman says that when she came into the camp she owed people a lot of money and was indebted for a number of years. She was motivated to work hard and now she is debt-free.

“If an approach doesn’t work, it just wasn’t the best for the situation, so we try another one.” says Ochieng.

The program has recovered about USD 28,000 of the initial grants which will help implement the second phase. (879 words)

(Written for LWI by Melany Markham in Ali Addeh, Djibouti)

This entry was posted in Emergencies, Somali Refugee Crisis 2011. Bookmark the permalink.

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