ASSOCIAZIONE MICROFINANZA E SVILUPPO ONLUS – RE-LAB: START UP YOUR BUSINESS

Context

The geopolitical situation in the world has led to a steady increase in migration flows between several countries and within different regions. The challenge to be faced is to find a way to promote a proactive answer to manage and also take advantage of the opportunities brought by this phenomenon. The increasing significance of which could be summarized in a few statistics (at the time of project closing in 2014): in the fourth quarter of 2014 the growth in the total number of applicants for international protection in the EU+ continued, rising 10% (with respect to the third quarter) to over 210.000 applicants. The situation is certainly even more dramatic now.

In the absence of formal processes, matching between who offers jobs and refugees seeking jobs often relies on informal ethnic networks and personal relations. Despite the fact that personal relations and informal ethnic networks might be considered a good and efficient opportunity, it is also in part a loss of opportunity to identify important skills and competencies beyond the individual. In Italy, job matching services are weak or totally inexistent for the relevant target group (i.e. refugees). This situation creates an ineffective and problematic social integration. Finally, given the overall difficult economic situation of Italy (and the EU), self-employment is often the only possibility for refugees to generate an income. However, everyone is not an entrepreneur, so potential entrepreneurs have to be identified and then adequately supported in the launch of their business ideas.

A study on the opportunities for self-employment and microcredit among beneficiaries of international protection funded by the European Refugee Fund and conducted by the Associazione Microfinanza e Sviluppo Onlus and the International Organization for Migration, in 2011, showed that about 42% of the refugees could receive great benefits from empowerment and training actions. This group was more or less equally divided into two groups: a first one who, despite having a good or even average level of resources in terms of cultural capital, professional and social skills, was in need of assistance towards better identifying goals to be achieved, and a second group consisting of those who already had clearly identified goals, but needed help in strengthening their resources (social networks, professional skills and economic capital). The study allowed for a better understanding of people as “not yet oriented” (group one) and “potential” (group two) clients, with the former requiring additional training and support towards developing their dreams.

Description of the initiative

Funded by the European Refugee Fund (through the Italian Ministry of Interiors), the RE-LAB project was a PILOT initiative addressing the needs of refugees beyond emergency assistance, i.e. the creation of employment and the access to finance. As such it sought to promote entrepreneurial initiatives among refugees by providing them with the necessary competencies and tools for developing and launching their business ideas through training, tutoring and mentoring, and financial support.

Implemented in 7 locations throughout Italy (Catania, Lecce, Milan, Rome, Turin, Trento, and Venice), this pilot initiative involved the following components:

  1. IDENTIFICATION AND SELECTION of potential entrepreneurs among the refugee population.
  2. ENTREPRENEURSHIP TRAINING for selected potential refugee entrepreneurs (total 96 hours):
    1. Entrepreneurship orientation (32 hours);
    2. Development of a business idea, model and plan (64 hours).
  3. ASSESSMENT AND SELECTION OF BUSINESS MODELS/PLANS for further (start-up) support.
  4. FINANCIAL (max EUR 15.000 grant per start-up) AND TECHNICAL (tutoring and mentoring) BUSINESS SUPPORT for selected start-ups.

Implementation of the initiative

The RE-LAB project was implemented in collaboration with the Associazione Microfinanza e Sviluppo ONLUS (Microfinance and Development Association, Trento), Microprogress ONLUS (Rome), Consiglio Italiano per i Rifugiati ONLUS(CIR – Italian Council for Refugees, Rome), International Training Center / International Labor Organization (ITC-ILO, Torino), and in association with the Municipality of Venice which provided general guidance and information sharing.

To ensure efficiency in the project’s operations, responsibilities were distributed to each of these partners and institutional actor.

The ITC-ILO is the lead partner of the project, it is responsible for:

  • overall coordination and monitoring;
  • interviews and selection of training participants (refugee beneficiaries) in North western Italy;
  • development of entrepreneurship training material;
  • training of potential refugee entrepreneurs in Milan and Turin;
  • training of future business tutors among trained refugees;

Associazione Microfinanza e Sviluppo onlus is responsible for:

  • interviews and selection of training participants (refugee beneficiaries) in North eastern Italy;
  • adaptation of entrepreneurship training material and development of entrepreneurship training methodology;
  • training of potential refugee entrepreneurs in Trento and Venice (Mestre);
  • development of assessment criteria and selection of business ideas to support to receive further support;
  • tutoring and mentoring of refugees during business start-up in Northern Italy;
  • management of business start-up fund;

Microprogress is responsible for:

  • interviews and selection of training participants (refugee beneficiaries) in Central and Southern Italy;
  • adaptation of entrepreneurship training material and development of entrepreneurship training methodology;
  • training of potential refugee entrepreneurs in Catania, Lecce and Rome;
  • development of assessment criteria and selection of business ideas to receive further support;
  • tutoring and mentoring of refugees during business start-up in Central and Southern Italy

The CIR is responsible for

  • initial screening (pre-selection) of potential refugee beneficiares;
  • communication and information sharing

Finally, in some cities (such as Trento), additional support (although not officially included as project partners) was also provided by some local entities assisting / working with refugees (such as the Associazione Trentina Accoglienza Stranieri, ATAS, and Cinformi in Trento)

Resources dedicated to the initiative

Financial sources

Overall budget:  1 858 748€ (1 082 490€ for module/year 1 and EUR 776.258 for module/year 2)

Human resources dedicated to the initiative

4.468 person days (around 12 Full time Equivalent) (2.675 person days for module/year 1, around 7 Full Time Equivalent, and 1.793 person days for module/year 2, around 5 Full Time Equivalent)

Achievements

Number of refugees reached by the initiative:

  • 341 refugees pre-selected and interviewed
  • 142 refugees selected and started entrepreneurship training
  • 98 refugees completed entrepreneurship training
  • 53 business plans submitted by trained refugees
  • 14 refugee micro businesses launched and provided with additional financial and technical support during business start-up
  • 12 future refugee business tutors trained

Critical success factors

  • In some locations (such as Trento), the support of local entities assisting / working with refugees has very been important for the identification (pre-selection) of potential entrepreneurs among the refugee population as well as for support to training participants during training (and eventually business start-up).
  • Interactive and participatory training as well as hands-on and individualized support to selected business ideas (possibly to be grouped and “standardized” for non-pilot initiatives when scaling up).
  • Careful assessment of entire business idea, model and plan as well as of potential entrepreneur (considering also social capital and network as an important resource).
  • Financial AND technical business support and tutoring conducted in parallel.
  • Initial financial support in the form of grant enabled some refugee entrepreneurs to leverage / access other funding (bank loans, community funding) – initial financial support possibly to include not only grant, but also credit or risk capital.

Biggest obstacles

  • Duration was too short – not even 2 years was not enough time to adequately support the start-up of businesses launched during module 2 (the second year of the project). Too tight of a timeline implied a delicate balance between reaching targets and avoiding the creation of future problems (i.e. the launch of not yet sufficiently developed or resourced business models/plans). A similar project should last at least 3 years (important to support not only the of launch but also the survival of businesses).
  • Eligibility criteria and administrative procedures on part of the Italian Ministry of Interiors (and the European Refugee Fund) for initial grant financing of refugee business start-ups were extremely inflexible and cumbersome. Need a more flexible approach (types of business vary) – any intervention within the EU should also allow for business start-up within any EU country (not just the ‘original’ hosting country) as refugees often have wide networks and mobility and perhaps greater possibilities elsewhere. Along the same lines, starting a business is never easy, but general (i.e. not connected to the project) Italian bureaucracy is certainly even more complicated for refugee (in the sense of non-Italian) entrepreneurs.
  • Identification and selection of actual/potential entrepreneurs is not always possible through one interview – important to assure cooperation with local entities assisting / working with target population and better to divide training into two distinct parts (with another selection in between); i.e. first part on development of business idea (and assessment of entrepreneurship skills) and second part on development of business model and plan.

Key lessons learned and recommendations for similar initiatives in the future:

  • Assure the creation of sustainable actions at an institutional, social and economic level.
  • Generalize interventions by designing a flexible and modular approach.
  • Build economies of scale in order to increase the results of the project (also by adopting a multi-country / EU-wide approach).
  • Design and foster local models of public/private partnership.

    Starting date

    October 2012 – June 2014

    The organisation

    Associazione Microfinanza e Sviluppo onlus is a non-profit association seeking to promote microfinance and support microenterprises in Italy as well as internationally.

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