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Kathryn Hoeflich, Director, CTRC Contributors: Phaladi Kotsie, Julien Verzier , & Lucy Doggett

Cape Town Refugee Centre. 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. Overview.

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Kathryn Hoeflich, Director, CTRC Contributors: Phaladi Kotsie, Julien Verzier , & Lucy Doggett

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  1. Cape Town Refugee Centre 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

  2. Overview • Introduction to the Self-Reliance Programme • A Few Case Studies • Challenges & Lessons “Learned”

  3. Introduction – CTRC’s 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.

  4. 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 (US$50 - 500) per person • Source for data for cases: less than 50% could be contacted, excuses, false addresses – 25% contactable

  5. 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

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. Challenges & Lessons “Learned” - 2 • Structural Challenges • Police harassment • Policy, by-laws, legislation & practice • Lending & micro-finance institutions • Challenges with CTRC’s 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

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