Refuge to Return: Building the Institutions for Development during Emergency Relief

ARC’s mission is to help refugees, internally displaced persons (IDPs), and host communities rebuild lives of dignity and self-sufficiency. Though many of our programs are based in refugee camps, it is not enough to simply help individuals in exile develop new skills without facilitating opportunities for those skills to be applied to rebuild communities once the conflict ends. Particularly in West Africa, where we worked with Liberian refugees in Guinea and Sierra Leone for almost a decade, we had to help our clients transition from relief to development.

When the peace agreement was signed in September 2003, we moved into Liberia. During the first year of our program, we provided business training and grants (BTG) to 2,000 clients, 80% of whom were former refugees, IDPs, or combatants, and facilitated loans and savings clubs (LOSACs) for 600. Over the next two years we continued to expand to reach 4,500 BTG clients and 6,500 LOSAC members. We added a business literacy component in the 2007-2008 project cycle that taught 600 women basic literacy and numeracy.

Less than one year after the peace agreement, we began setting up Liberty Finance, which began lending in January 2005. In the first year, Liberty Finance expanded to three branch offices in Monrovia. As commercial banks began operating in the counties, Liberty Finance quickly set up branch offices in the county capitals to reach the rural poor. After only three years of operations in an extremely difficult post-conflict environment, Liberty Finance is ready to become independent.

Liberty Finance CEO Enam Haque has worked in microfinance management for the past twelve years. Originally from Bangladesh, he worked in Bangladesh, Tanzania, and Afghanistan before coming to Liberia. Most recently, Mr. Haque managed BRAC’s Tanzania microfinance portfolio worth $6.8 million that served 58,000 clients with a 99% repayment rate. Mr. Haque is supported by ARC International’s MED Technical Advisor Mr. Terry Isert, who has ten years of experience in microenterprise development and microfinance and masters in international development and business administration.

ARC Liberia and Liberty Finance enable vulnerable microentrepreneurs to create wealth with which to buy critical goods and services for their households. Preliminary results from an impact assessment of ARC’s MED program conducted in September 2008 show that our 2,500 business training and grants clients (the first step of our graduated program) have generated an average of $13 per week in profits, 86% of which is saved, through their new or expanded businesses. This increased income has enabled them to invest in critical goods and services for their households: 60% were able to invest in housing, 92% spent more on education, and 71% spent more on health due to their participation in the BTG program. As BTG is the first stage of our program, and microentrepreneurs generate increasing amounts of income as they graduate to LOSACs and microloans, it is reasonable to estimate that beneficiaries of the subsequent stages of refuge to return gain at least as much purchasing power as a result of their participation in the programs.

Refuge to return enables conflict-affected entrepreneurs to sell goods and services by managing microenterprises and loans and savings clubs (LOSACs). Beginning with business training and grants (BTG), ARC gives microentrepreneurs the business management skills and start-up capital required to start retail businesses that supply items such as rice, oil, and dry goods. Once these entrepreneurs have begun to generate profit, we organize them into LOSACs to pool their growing savings. LOSACs offer interest-generating savings services to their members and lending services to both members and non-members. Liberty Finance’s microloan clients expand their more mature businesses to provide goods and services to an increasing number of customers.