A isa, Line Nyanchama
A icle
The ole o o mal and in o mal inancing in e ugee sel -
employmen : The case o ban Kenya
Economies
P o ided in Coope a ion wi h:
MDPI – Mul idisciplina y Digi al Publishing Ins i u e, Basel
Sugges ed Ci a ion: A isa, Line Nyanchama (2025) : The ole o o mal and in o mal inancing in
e ugee sel -employmen : The case o ban Kenya, Economies, ISSN 2227-7099, MDPI, Basel, Vol.
13, Iss. 4, pp. 1-21,
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Recei ed: 9 Decembe 2024
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Published: 2 Ap il 2025
Ci a ion: A isa, L. N. (2025). The Role
o Fo mal and In o mal Financing in
Re ugee Sel -Employmen : The Case
o U ban Kenya. Economies,13(4), 100.
h ps://doi.o g/10.3390/
economies13040100
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A icle
The Role o Fo mal and In o mal Financing in Re ugee
Sel -Employmen : The Case o U ban Kenya
Line Nyanchama A isa
In e na ional Cen e o Resea ch on Women, Nai obi P.O Box 42818-00100, Kenya; [email p o ec ed] o
la isa@ic w.o g
Abs ac : Conside ing e ugees’ employmen challenges in hei hos coun ies, hey o -
en need o c ea e jobs by s a ing en u es and emb acing sel -employmen . Howe e ,
his equi es inancing. This s udy seeks o assess he oles o o mal and in o mal i-
nancing in sel -employmen while also looking a he d i e s o inancing decisions and
sel -employmen among e ugees in an u ban se ing. Using he ex ension o he Blinde –
Oaxaca decomposi ion pionee ed by Fai lie, his s udy ound in o mal inancing o be
signi ican ly associa ed wi h an indi idual’s decision o be sel -employed, while o mal
inancing is no . Male e ugees who access in o mal inancing ha e a highe p obabili y
o emb acing sel -employmen han e ugee women and Kenyan na ionals; his calls o
ac ions ha encou age o ming communi y-based o ganiza ions ha p omo e a i ma i e
ac ion and s ee he use o in o mal inance.
Keywo ds: o cibly displaced pe sons (FDPs); o mal and in o mal inancing;
sel -employmen
1. In oduc ion
Gi en he g owing numbe o o cibly displaced pe sons (FDPs) in e na ionally and
na ionally, he p oblem o o ced displacemen has become a majo conce n o bo h
social and public policy. The UNHCR (2024a) epo on global ends es ima es ha
117.3 million people had been o cibly displaced wo ldwide a he end o 2023, wi h a
popula ion o 122.6 million people being unde UNHCR p o ec ion and/o assis ance
(UNHCR,2024a). This displacemen is a esul o con lic , iolence, clima e- ela ed e ec s,
human igh s iola ions, e hnic and eligious in ole ance, and he poo managemen o
public a ai s, among o he sociopoli ical issues (UNHCR,2021). Eigh y- i e pe cen o he
o cibly displaced popula ion is hos ed in low- and middle-income coun ies (UNHCR,
2021;Zademach e al.,2019). Kenya alone hos ed 691,868 e ugees by he end o 2023,
which inc eased o 823,923 by 2024 (UNHCR,2023,2024b). O his popula ion, he UNHCR
suppo s 274,816 o Kenyan egis e ed e ugees and asylum seeke s (UNHCR,2023).
Despi e in e en ions by he in e na ional communi y and o he non-go e nmen al
o ganiza ions ega ding humani a ian assis ance o hos coun ies, he huge popula ion
o o cibly displaced pe sons o e whelms such e o s, o cing hos ing go e nmen s o
g apple wi h nume ous challenges associa ed wi h he s abiliza ion and se ling o displaced
pe sons (Ve me & Schue le ,2021). I is commonplace o humani a ian agencies o pu
e o s in o o ganized FDP camps, paying less a en ion o long- e m displaced esiden s
in he b oade communi y who a e also g appling wi h compe i ion o esou ces and
oppo uni ies.
Kenya, which sha es bo de s wi h na ions bese by e hnic con lic s, in e nal dis u -
bance, and economic and en i onmen al deg ada ion, a ac s asylum seeke s om neigh-
bo ing coun ies. Wi h o e hal a million e ugees and asylum seeke s who ha e been
Economies 2025,13, 100 h ps://doi.o g/10.3390/economies13040100
Economies 2025,13, 100 2 o 21
displaced o long pe iods, Kenya hos s e ugees om Somalia, Sou h Sudan, E hiopia, DRC,
Bu undi, Uganda, and Sudan. Mos e ugees a e concen a ed in he Dadaab, Kakuma,
Kalobeyei, and Nai obi camps. Kenya is among he ew A ican coun ies wi h an asylum
egime ha has been lexible and accommoda ing. Howe e , in ecen yea s, Kenya’s asy-
lum egime has unde gone subs an ial changes in i s policy amewo k and managemen
p ac ice due o changing secu i y dynamics (Kiama & Ka anja,2012).
Re ugees in Kenya expe ience a ious socioeconomic challenges in hei e o s o
su i e, conside ing he limi ed esou ces ha mus be sha ed be ween hem and he hos
communi y membe s. Fo ins ance, e ugees in Kenya a e o en placed in emo e dese
camps, whe e hei mobili y and access o employmen a e es ic ed, o cing hem o
ind su i al s a egies o o e come mul iple challenges and obs acles. En ep eneu ship
and sel -employmen o e an app oach o mee ing hei objec i es. Howe e , o sel -
employmen o yield esul s, echnical suppo and en ep eneu ship aining, ma ke
access, and inances may be equi ed, which p esen s e ugee challenges ega ding access
and use.
E idence has shown ha e ugees can con ibu e posi i ely o he hos economy i
allowed o pu sue li elihoods, in eg a e socially, and be inancially included (Zademach
e al.,2019). Some esea ch has po ayed o mal inancing as playing a ole in suppo ing
e ugees in hei economic endea o s (Ande loni & Vandone,2018); i has been a gued o
help hem in eg a e in o he local economy and socie y, p omo ing sel - eliance, economic
independence, and social inclusion. O he esea che s ha e, howe e , a gued ha he e is
no a ionale o e ugees o use inancial se ices o sa e o in es since inancial se ices
can only ma ginally imp o e hei li es (Dhawan e al.,2022;Dhawan,2022). Dhawan and
Zollmann (2023) u he claim ha he inancial se ices p o ided o FDPs a e no mean
o empowe bu a he o isola e and limi e ugees’ ansac ions, hus e ec i ely excluding
hem. Bhaga (2022) and K ause and Schmid (2020) also a gue ha sel - eliance ans o ms
e ugees in o disposable subjec s in capi alism a a ious s ages o he asylum p ocess and
aids he powe o humani a ian agencies o e he e ugees.
While esea ch on inancing e ugees o sel -employmen has g own in ecen yea s,
explo ing he po en ial syne gies and challenges o in eg a ing o mal and in o mal inanc-
ing mechanisms o e ugee sel -employmen is necessa y. Unde s anding how o mal
inancial ins i u ions can collabo a e wi h in o mal lende s, sa ing g oups, and communi y-
based o ganiza ions o p o ide comp ehensi e and sus ainable inancial suppo will be
c ucial; his s udy aims o ill his gap in he li e a u e by in es iga ing he con ibu ion
o o mal and in o mal inance o sel -employmen among u ban e ugees in Kenya and
assessing he de e minan s o inancing choice and sel -employmen . This will hope ully
spu mo e in es iga ion in o he ba ie s ha hinde FDPs om accessing o mal inancing
o allow inancial ins i u ions o design p oduc s ha can mee hese unique needs, explo e
mechanisms ha b idge he gap be ween o mal and in o mal inancing channels, and
le e age he s eng h o bo h.
Mo e wo k is needed o p o ide insigh s in o whe he policymake s should ad oca e
o inancing e ugees and, i inancing is needed, which o m should be encou aged. Using
an ex ension o he Oaxaca (1973) decomposi ion by Fai lie (2014) and o he desc ip i e
s a is ics, his s udy di es in o he 2021 Socioeconomic Su ey o U ban Re ugees in Kenya
o p o ide mo e e idence on he impac o o mal and in o mal inance on sel -employmen .
To a ain hese objec i es, his s udy answe s he ollowing ques ions: (a) O he han
inancing, wha ac o s in luence he decision o choose sel -employmen among e ugees?
(b) Wha a e he con ibu ions o o mal and in o mal inancing owa ds sel -employmen
among e ugees?
Economies 2025,13, 100 3 o 21
1.1. Fo mal s. In o mal Financing
Financing sou ces can be o mal o in o mal. Fo mal inancing e e s o inancial
esou ces acqui ed h ough o icial channels, such as banks, inancial ins i u ions, c edi
unions, o o he egula ed inancial in e media ies; hese o en equi e o mal applica ions,
documen a ion, and colla e al. In con as , in o mal inancing includes inancial esou ces
ha a e acqui ed ou side o he o mal inancial channels, p ima ily hose p o ided by
ela i es, iends, and in o mal g oups and associa ions, wi hou he equi emen o o mal
documen a ion and colla e al (Ayyaga i e al.,2010;Gui kinge ,2011;Hou e al.,2020;
Nguyen & Canh,2021).
The dis inc ion be ween o mal and in o mal inancing is he legal and egula o y
amewo ks ha go e n hei ope a ions. Go e nmen au ho i ies usually moni o and
egula e o mal inancing, while in o mal inancing ope a es ou side o mal egula ions
(Deg yse e al.,2016;Ka ai ano & Kessle ,2018). Addi ionally, o mal inancing is mo e
s uc u ed, wi h s anda dized e ms and condi ions, while in o mal inancing is o en
lexible, wi h less o mal ag eemen s, and may a y subs an ially ega ding in e es a es
and epaymen schedules. E en hough o mal inancing may be mo e a o dable and
long- e m, i may equi e colla e al, c edi his o y, and legal documen s such as na ional
iden i y ca ds, which may be lacking among FDPs (Tu kson e al.,2022). Since FDPs end
no o ha e angible asse s as colla e al, lende s o en conside hem high isk. Cul u al
and eligious no ms abou c edi and in e es hinde FDPs om accessing o mal c edi
sou ces. As a esul , FDPs o en ely on in o mal inancing s uc u es, which end o be
isky and exploi a i e.
1.2. P og ess on Re ugee Financial Inclusion in Kenya
The e has been subs an ial p og ess in he p o ision o inancial solu ions o e ugees.
In collabo a ion wi h local banks and mic o inancial ins i u ions, he in e na ional commu-
ni y has been explo ing o mal inancing modali ies ha wo k o e ugees, conside ing
hei documen a ion and o he inancing- ela ed challenges (Che u o,2024). Fo ins ance,
he In e na ional Rescue Cen e (IRC) suppo s a p ojec ha p o ides small loans o
e ugees o s a businesses (Rebuild,2017). Re ugePoin also has an ini ia i e ha enables
e ugees in Nai obi o open bank accoun s wi h Pos bank; his enables business g an s o
be deposi ed di ec ly in o hei accoun s, along wi h en assis ance and eme gency aid
(Re ugePoin ,2021). These sa ings accoun s help e ugees become sel - elian by building
a inancial his o y o access o mal c edi . The In e na ional Finance Co po a ion has also
ini ia ed a isk-sha ing acili y wi h equi y banks o p o ide inancial se ices o e ugees
(Abdalla,2024). Howe e , e ugees’ he e ogenei y, ega ding hei a ied economic and
p o essional backg ounds, eligion, gende , age, and o he demog aphics, calls o di e en
inancial solu ions o add ess hei needs.
In addi ion, Bamba Chakula, which is a cash-based in e en ion designed by he
Wo ld Food P og am (WFP) in collabo a ion wi h Sa a icom, as an al e na i e o he in-kind
ood aid cash p og am, enables e ugees o s a hei businesses, egis e he businesses
wi h he p og am, and, hus, gene a e income by ading (Be s e al.,2018;WFP,2015;
UN-WFP,2016). Many e ugees who ha e aken ad an age o his p og am a e sel - elian
in se lemen camps, unning h i ing businesses, selling o ellow e ugees, and bene i ing
om mon hly Bamba Chakula p og ams (Be s e al.,2018). Wi hin he same camps,
howe e , a e po e y-s icken amilies elying mainly on cash ans e s (Be s e al.,2018);
his calls o inancial solu ions ha can se e hese di e ing g oups o he displaced
popula ion, upli ing he li ing s anda ds o all.
Few inancial ins i u ions se e he needs o e ugees. Some equi y bank b anches
allow camp-based access o open bank accoun s. E en hough he digi al inancial ma ke
Economies 2025,13, 100 4 o 21
is highly de eloped in Kenya, e ugees do no ha e ull access o hese se ices since
hey canno di ec ly access egula M-Pesa walle s (mobile money). Mobile money is only
limi ed o hose wi h Kenyan iden i y documen s. Re ugees ha e locked walle accoun s
(Bamba Chakula) designed o he WFP o dis ibu e cash o ood i ems in selec s o es
wi hin he se lemen camps (Be s e al.,2018).
The UNHCR, he In e na ional Finance Co po a ion (IFC), and he ILO ha e de eloped
join p og ams o suppo inancial se ice p o ide s in p o iding a o dable inancial
se ices o e ugees (Abdalla,2024). Un o una ely, only a hand ul o inancial se ice
p o ide s ha e conside ed ex ending hei se ices o e ugees. Also, conce ns abou money
launde ing and e o ism inancing ha e made inancial p o ide s cau ious, enac ing s ic
ules ha hinde FDPs om accessing inancial se ices. Wi hou adequa e access o such
inancial se ices, e ugees lack a enues o add ess hei inancial needs and sus ain hei
li elihoods (Singh,2023).
2. Li e a u e Re iew
Mig a ion decisions o he FDPs a e no he esul o choice; in olun a y displacemen
comes om he sudden shock (Ve me & Schue le ,2021). FDPs mainly conside p oximi y,
ne wo ks, and secu i y c i e ia whene e hey mo e. Thei main objec i e is o sa is y
hei basic needs and ensu e a b igh e u u e o hemsel es and hei child en, mos ly
h ough educa ion and be e heal h (Rwama wa a,2009). Howe e , FDPs usually se le in
emo e and poo communi ies whe e compe i ion o hese basic ameni ies is al eady high
(Mugisha & Si aje,2023;Tu kson e al.,2022). Locals may iew FDPs as people who ha e
come o ake away hei esou ces, hus c ea ing con lic s (Rwama wa a,2009).
Resea ch has shown how he in lux o FDPs a ec s hos coun ies conce ning inc eas-
ing unemploymen (Geo ge & Adelaja,2021). Fo ced mig a ion also causes labo supply
shocks by educing eal wages o u ban unskilled wo ke s who compe e o jobs wi h
o ced mig an s (Calde on & Ibanez,2009). Acco ding o Ruiz and Va gas-Sil a (2013), his
e ec is usually g ea es in he in o mal sec o , leading o commodi y p ice inc eases. O he
esea che s a gue ha o ced displacemen esul s in economic shocks h ough he in lux o
popula ion and inc eased expendi u es due o mass mo emen and concen a ion in camps
(Fiala,2015). The expendi u e shock esul s occu because once he o ced mig a ion occu s,
humani a ian agencies elease aid o he hos coun ies, supplemen ing he sa ings held by
he FDPs, hus inc easing demand and pu chasing powe , a ec ing expendi u e (Ve me &
Schue le ,2021). Ul ima ely, his c ea es jobs h ough inc eased demand o goods and
se ices, new en e p ises de elop, and sales inc ease.
The issues o FDPs ha e always been pe cei ed as a empo a y p oblem ha equi es
empo a y solu ions. Howe e , ecen ly, i has been no ed ha e ugees end o be s uck
in hos coun ies o an a e age o 26 yea s (UNHCR,2021;Oma a,2021). Conside ing
he leng h o ime ha FDPs ake o success ully manage o e u n o hei home coun ies
a e c ises, p o iding basic needs is no sus ainable o he humani a ian agencies in he
long un (Kachka ,2017). Taking no e o he ac ha o e 85 pe cen o he e ugees
se le in de eloping coun ies, which a e also ba ling de elopmen al challenges such as
employmen , he e is a need o es ablish mo e ways o imp o ing li elihoods, in eg a ing
FDPs in o he local communi y, and expanding hei social ne wo ks (Kachka ,2017). In
o de o a oid building a cul u e o dependency among FDPs, especially when basic needs
a e all p o ided, i has been ad oca ed ha hey be engaged in economic ac i i ies in ei he
ag icul u e o business (Ruiz & Va gas-Sil a,2013).
Financial inclusion h ough opening bank accoun s, as one o he UNHCR’s key
p io i ies, p omo es sel -employmen among e ugees and s imula es economic ac i i y
(Mugisha & Si aje,2023). A ocus on he Eu opean con ex iden i ies access o inance as
Economies 2025,13, 100 5 o 21
a signi ican ac o a ec ing e ugees’ abili y o engage in en ep eneu ial ac i i ies and
calls o mo e a ge ed suppo mechanisms (B zozowski & Voznyuk,2024). Newman
e al. (2024), in hei analysis o he ac o s in luencing e ugees’ en ep eneu ial ac i i ies,
emphasize he c i ical ole o inancial esou ces in enabling e ugees o s a and sus ain
businesses while iden i ying ba ie s such as limi ed access o o mal inancing channels.
In addi ion, Heilb unn and Iannone (2020) also discuss he impo ance o inancial capi al
o e ugee en ep eneu s and highligh he challenges hey ace in accessing unding due
o legal and ins i u ional cons ain s.
In Kenya, ew e ugees engage in income-gene a ing ac i i ies since mos a e employed
by non-go e nmen al o ganiza ions (NGOs) as incen i e wo ke s wi h pay es ic ions
(Be s e al.,2018). Fo mal c edi o e ugees is one o he digni ied ways o imp o e hei
abili y o gene a e income h ough sel -employmen . Many households may be willing
o be in ol ed in ag icul u e o do business bu lack esou ces like su icien wa e and
seeds o ag icul u e and capi al o conduc ing business. While looking a sel - eliance in
Kalobeyei, Be s e al. (2018) ound ha many esiden s su e ed due o a lack o economic
ac i i ies a he camps and hei su oundings. The Kalobeyei se lemen aimed o ansi ion
e ugees om aid dependence o sel - eliance and in eg a e hem wi h he hos communi ies
h ough he Kalobeyei In eg a ed Social and Economic De elopmen P og am (KISEDP).
Howe e , his aim was no ully ac ualized due o he in lux o Sou h Sudanese e ugees,
who s ill needed eme gency assis ance (Be s e al.,2018).
Mos FDPs a e equipped wi h en ep eneu ial ma ke able skills ha can be exploi ed
o ea n some income. These skills can be u ilized o imp o e hei li elihoods, bu in
mos ci cums ances, hese skills a e no exploi ed (de Lange e al.,2021). Acco ding o
Kachka (2017), e ugees can ac i ely engage in income-gene a ing ac i i ies ha imp o e
hei socioeconomic si ua ion. Kachka (2017) ad oca es o es ablishing mic o inance and
s a -up unds o p omo e en ep eneu ship among e ugees in e ugee camps and u ban
a eas, no ing ha he cha i able ins i u ion o waq (endowmen ) can be used o de elop
a sus ainable model o p omo e he economic engagemen o e ugees. Fo ins ance,
he Bamba Chakula p og am by he WFP p o ides oppo uni ies o e ugees o ade
amongs hemsel es; his is a cash p og am, which implies ha e ugees can s a hei
businesses, egis e hem wi h Bamba Chakula, and hus gene a e income by ading
amongs hemsel es (Be s e al.,2018).
S udies in Kenya’s Kakuma camp ha e shown a h i ing in o mal economy, wi h
oppo uni ies in clean ene gy p oduc s, was e managemen and ecycling, sani a ion,
ege able and ui alue chains, and o he necessa y i ems (Kibuka-Musoke & Sa zin,
2021). Howe e , mos o he businesses a e owned by Kenyan esiden s because he
e ugees lack he necessa y capi al o es ablish such en e p ises. They also lack educa ion,
skills, and alen s o use as business owne s o employees. Acco ding o Kibuka-Musoke
and Sa zin (2021), inancial li e acy is also low among e ugees, making access o inance
challenging. Town esiden s a e mo e likely o ecei e c edi han hose in camps. The
e ugees lack ele an in o ma ion on a ailable inancing oppo uni ies.
Language ba ie s also pose a huge challenge o e ugees’ access o inancial se -
ices, as inancial se ice p o ide s employ only locals who canno communica e wi h he
e ugees. The inabili y o communica e wi h s a a hese ins i u ions p e en s e ugees
om accessing he necessa y se ices. Ande loni and Vandone (2018) a gue ha some ail
o access inancial se ices due o sel -imposed ba ie s such as dis us o inancial se ice
p o ide s. Ins ead o dealing wi h local banks, some e ugees decide o make all hei ans-
ac ions in cash o sa e wi h money gua ds (people who keep money sa e o indi iduals).
Acco ding o Ande loni and Vandone (2018), his dis us may be sel -imposed; i is an
Economies 2025,13, 100 6 o 21
indi idual choice, no ci cums an ial. The e o e, he e is a need o sensi ize FDPs o gain
he us o es ablished inancial p o ide s.
The loca ion o inancial p o ide s also ac s as a ba ie o accessing inancial se ices.
Mos banks a e loca ed in owns, while e ugee camps, especially in Kenya, a e in emo e
a eas in he coun y’s no he n pa s (Ande loni & Vandone,2018). T a eling o access
hese se ices hus ep esen s a la ge cos o FDPs. In addi ion, e ugees end o equi e
small amoun s o c edi o es ablish small businesses. F om a business/p o i pe spec i e,
banks canno mee hei ixed cos s wi h such small loans and a e no incen i ized o se e
hese popula ions.
S udies pe o med in he USA ha e shown ha immig an en ep eneu s o en ely
on a single sou ce o inancing—mo e speci ically, in o mal o boo s apping, whe eby
hey end o a oid equi y inancing (Moghaddam e al.,2017). Gachoka and Me ab (2021)
in es iga ed inancial sou ces ha e ugees use in Kenya and Uganda and ound ha 40%
o households sou ce hei income h ough sel -employmen . Sa ing g oups ha e been
es ablished o he in o mal bo owing and eceip o emi ances. Since he FDPs a e
conside ed high-c edi isk cus ome s by o mal inancial p o ide s, he e ugees o en
o m g oups ha egula ly con ibu e an ag eed amoun o money and sa e. Once hese
sa ings a e su icien , he e ugee g oup membe s bo ow amongs hemsel es and epay
hei deb s wi h in e es . Some sa ing g oups ecei e o mal inancing om inancial
p o ide s and hen lend his o g oup membe s. The e is an oppo uni y o inancial
se ice p o ide s o design inno a i e p oduc s and se ices o ca e o he needs o he
FDPs h ough hese social g oups.
The need o s imula e en ep eneu ship among FDPs has been a icula ed in he
UNCTAD (2018) policy guide. The majo hind ance has always been he empo a y s a us
o FDPs in hos coun ies, which limi s hei oppo uni ies and igh s (de Lange e al.,2021).
Pull and push ac o s acili a e he oppo uni y and necessi y o engage in en ep eneu ship.
In addi ion, ac o s like gende , age, ea o ailu e, and an indi idual’s inancial and social
capi al a ec he oppo uni y o engage in en ep eneu ship (Sahas anamam & Sud,2016).
Howe e , mos esea ch ocuses on labo in eg a ion h ough wage employmen (S. O.
Becke ,2022;Calde on & Ibanez,2009;Rwama wa a,2009;Ruiz-Va gas,2000;Ruiz &
Va gas-Sil a,2016). Since unemploymen is s ill a p oblem, e en wi h hos communi ies,
i is p uden o conside di e en app oaches o he e ugees’ p oblems. I is, he e o e,
aluable o collabo a ing pa ne s o p esen en ep eneu ship as one o he solu ions by
making delibe a e e o s o p o ide inancing, which will c ea e an oppo uni y o FDPs
o emb ace and hus c ea e employmen o imp o e hei li elihoods.
These p io s udies emphasize he challenges e ugees ace, including compe i ion o
esou ces, labo ma ke dis up ions, and inancial exclusion, ocusing mo e on ex e nal
in e en ions by go e nmen s and humani a ian o ganiza ions. This s udy, howe e , shi s
he na a i e om dependency o agency by e aming e ugees as ac i e agen s o change
capable o shaping hei economic u u es h ough sel -employmen . A coun y like Kenya,
whe e wage employmen is sca ce, places e ugees a he cen e o decision-making by
explo ing how FDPs can ac i ely u ilize hei en ep eneu ial skills, ne wo ks, and a ailable
esou ces o co-c ea e sus ainable li elihood solu ions. The s udy ad ances he discussion
by examining how e ugees can ansi ion o economic sel - eliance o e ex ended pe iods,
con ibu ing o local economies while educing aid dependency. This pe spec i e is c ucial
in mo ing beyond he dominan iew o e ugees as passi e aid ecipien s.
3. Theo e ical Backg ound
While na ionals a e mo e likely o engage in sel -employmen due o pull ac o s
such as pe cei ed oppo uni y, business po en ial, and suppo i e inancial en i onmen s,
Economies 2025,13, 100 7 o 21
e ugees o en engage in sel -employmen due o necessi y-d i en push ac o s such as
unemploymen , legal ba ie s o o mal employmen , and su i al needs. Financing is
c ucial o indi iduals seeking o become sel -employed. Fo mal inancing, such as bank
loans, en u e capi al, and go e nmen g an s, can alle ia e liquidi y cons ain s and
p o ide he necessa y capi al o s a and sus ain a business. In con as , in o mal inancing
sou ces, such as loans om amily, iends, communi y-based sa ings g oups, and pe sonal
sa ings, o en play a signi ican ole in suppo ing en ep eneu s lacking access o o mal
inancial ins i u ions. Bo h ypes o inancing a e i al o enabling sel -employmen ,
which d i es job c ea ion h ough di ec hi ing, he mul iplie e ec , inno a ion, and
economic di e si ica ion.
Local na ionals ha e be e access o o mal inancing mechanisms, including bank
loans and mic o inance ins i u ions, and bene i om es ablished c edi sys ems, lowe
pe cei ed isks by lende s, and go e nmen -backed ini ia i es designed o p omo e en-
ep eneu ship. On he o he hand, e ugees’ inancing decisions a e speci ic due o hei
di e se challenges, including in o ma ion asymme ies because o hem being in a o eign
coun y and en i onmen , language ba ie s, legal documen a ion, gaining us om he
local communi y, and unce ain y ega ding he du a ion o hei s ay. Despi e hei need
o inancial se ices, such challenges o en limi e ugees’ access o o mal (bank) inancing,
e en in a well-de eloped inancial sys em base such as Kenya, esul ing in ma ke ailu e.
In o mal inancing a ises as a esponse o he di e se ma ke ailu es among hese e ugees,
which cons ain households om accessing o mal inancing h ough c edi , sa ings, and
pe sonal bank accoun s (Kedi e al.,2021).
F om he demand side, e ugees, especially e hnic mino i ies, may su e om cog-
ni i e inancial cons ain s, including inancial illi e acy and language ba ie s. F om he
supply side, e hnic mino i ies/ e ugees may ace disc imina ion (Nguyen & Canh,2021).
Ha ing g own up in he local con ex , na ionals bene i om amilia i y wi h local economic
sys ems and mo e s able li ing condi ions, enabling hem o na iga e o mal and in o mal
inancing mechanisms mo e e ec i ely. G. S. Becke ’s (1971) as e-based heo y sugges s
ha some economic agen s may p e e no o ansac wi h pa icula se s o people who
may no be simila o hem due o pe cei ed unce ain y and us . In o ma ion-based
heo y also a gues ha lende s may ha e pe cei ed in o ma ion abou mino i y g oups,
belie ing ha hey a e less p oduc i e, less educa ed, and less capable and hus h ea en
he lende s’ p o i abili y. (Nguyen & Canh,2021) a gue ha hese nega i e a i udes lead o
disc imina ion, hus dep i ing mino i ies o hei igh o access o mal inancing.
Some households use nei he in o mal no o mal inancing, while o he s use bo h.
This esul s om he e ogeneous as es and p e e ences and, o some ex en , income (Kedi
e al.,2021). Fo mal inancing is ela i ely sa e, hough cos ly, while in o mal inancing
can be isky, wi h unce ain y in he payou iming. Howe e , gi en bo owing cons ain s
due o he lack o colla e al o building us wi h banks, he ea ly payou om in o mal
inancing sou ces p o ides he majo sou ce o inancing o high-yield in es men in capi al
goods and consume du ables o e ugees. Capi al asse s pu chased h ough o mal (bank)
c edi gene a e highe e u ns because hey a e likely o be pu chased. Howe e , hey also
in ol e highe isk since he loan has o be epaid e en wi h in es men ailu e; in con as ,
in o mal inancing in ol es isk sha ing. Thus, o mal inancing may no p eclude in o mal
inancing bu may co-exis (Kedi e al.,2021).
Acco ding o a s udy by S igli z and Weiss (1980), o mal lende s ha e limi ed in o -
ma ion conce ning he households, hus eso ing o colla e al equi emen s o o e come
mo al haza d and ad e se selec ion p oblems. Those lacking colla e al may in olun a ily
be excluded om o mal c edi , hus eso ing o in o mal lende s wi h in o ma ion ad-
an age. Con a y o hese heo e ical a gumen s, in o mal c edi may no be a las eso
Economies 2025,13, 100 8 o 21
bu a ma e o choice. In o mal c edi om amily and iends may be less expensi e
han o mal loans and hus is p e e ed by bo owe s. T ansac ion cos s ela ed o o mal
c edi applica ions may discou age households om seeking such loans. In o mal loans
can be easie o access since he lende s can access g ea e in o ma ion, easing he appli-
ca ion p ocedu es and hus gene a ing lowe ansac ion cos s; his b ings he e ec i e
cos o in o mal loans below he e ec i e cos o o mal loans, incen i izing ansac ion
cos - a ioned households/indi iduals o ake up in o mal c edi despi e hei highe in e -
es a es
(Gui kinge ,2011)
. In o mal loans may also be p e e ed due o isk ad an age.
When in o mal lende s ha e be e access o ele an in o ma ion, hey can w i e mo e
s a e-con ingen con ac s han o mal lende s and hus become less isky o bo owe s
(Kedi e al.,2021).
4. Concep ual F amewo k
Financing plays a mul i ace ed ole in sel -employmen , in luencing e e y hing om
he decision o become sel -employed o he long- e m success and g ow h o he busi-
ness. Figu e 1illus a es he ela ionship be ween inancing ( o mal and in o mal) and
sel -employmen o e ugees, highligh ing key in e ening ac o s ha in luence his e-
la ionship and he po en ial ou comes. Bo h o ms o inancing se e as inpu s ha uel
en ep eneu ial ac i i ies. The abili y o engage in sel -employmen depends on inancing
and a ange o con ex ual ac o s (economic, social, policy, and legal en i onmen , human
capi al, ins i u ional suppo , and cul u al no ms, among o he ac o s).
Economies 2025, 13, x FOR PEER REVIEW 8 o 21
be excluded om o mal c edi , hus eso ing o in o mal lende s wi h in o ma ion ad-
an age. Con a y o hese heo e ical a gumen s, in o mal c edi may no be a las eso
bu a ma e o choice. In o mal c edi om amily and iends may be less expensi e han
o mal loans and hus is p e e ed by bo owe s. T ansac ion cos s ela ed o o mal c edi
applica ions may discou age households om seeking such loans. In o mal loans can be
easie o access since he lende s can access g ea e in o ma ion, easing he applica ion
p ocedu es and hus gene a ing lowe ansac ion cos s; his b ings he effec i e cos o
in o mal loans below he effec i e cos o o mal loans, incen i izing ansac ion cos - a-
ioned households/indi iduals o ake up in o mal c edi despi e hei highe in e es a es
(Gui kinge , 2011). In o mal loans may also be p e e ed due o isk ad an age. When
in o mal lende s ha e be e access o ele an in o ma ion, hey can w i e mo e s a e-
con ingen con ac s han o mal lende s and hus become less isky o bo owe s (Kedi
e al., 2021).
4. Concep ual F amewo k
Financing plays a mul i ace ed ole in sel -employmen , in luencing e e y hing om
he decision o become sel -employed o he long- e m success and g ow h o he business.
Figu e 1 illus a es he ela ionship be ween inancing ( o mal and in o mal) and sel -em-
ploymen o e ugees, highligh ing key in e ening ac o s ha in luence his ela ion-
ship and he po en ial ou comes. Bo h o ms o inancing se e as inpu s ha uel en e-
p eneu ial ac i i ies. The abili y o engage in sel -employmen depends on inancing and
a ange o con ex ual ac o s (economic, social, policy, and legal en i onmen , human cap-
i al, ins i u ional suppo , and cul u al no ms, among o he ac o s).
Fo mal and in o mal inancing ha e dis inc ad an ages, limi a ions, and challenges
ela ed o accessibili y, affo dabili y, and a ailabili y. Gi en hese limi a ions, e ugees
ely on inancing op ions ha mee hei needs o use a hyb id inancing model. The e -
ec i eness o inancing in p omo ing e ugee sel -employmen is signi ican ly in luenced
by o he con ex ual ac o s ha se e as ei he enable s o ba ie s o en ep eneu ship.
Fo his o be effec i e, i mus be complemen ed by a suppo i e policy, economic, and
social en i onmen . I inancing is suppo ed by a o able in e ening ac o s, sel -em-
ploymen esul s, income gene a ion, and he empowe men o e ugees a e achie ed.
Figu e 1. Concep ual amewo k.
5. Me hodology
Figu e 1. Concep ual amewo k.
Fo mal and in o mal inancing ha e dis inc ad an ages, limi a ions, and challenges
ela ed o accessibili y, a o dabili y, and a ailabili y. Gi en hese limi a ions, e ugees
ely on inancing op ions ha mee hei needs o use a hyb id inancing model. The
e ec i eness o inancing in p omo ing e ugee sel -employmen is signi ican ly in luenced
by o he con ex ual ac o s ha se e as ei he enable s o ba ie s o en ep eneu ship. Fo
his o be e ec i e, i mus be complemen ed by a suppo i e policy, economic, and social
en i onmen . I inancing is suppo ed by a o able in e ening ac o s, sel -employmen
esul s, income gene a ion, and he empowe men o e ugees a e achie ed.
5. Me hodology
As he s udy seeks o in es iga e he ole o o mal e sus in o mal inance on sel -
employmen , we i s es ima e he in luence o inancing decisions on he choice be ween
Economies 2025,13, 100 15 o 21
Table 6. Bina y logis ic eg ession esul s modeling.
Va iable Sel -Employmen s. O he
Fo mal inance 0.418
(0.427)
In o mal inance −0.381 ***
(0.109)
Gende (woman) −0.539 ***
(0.113)
Language (canno speak English/Swahili)
−0.641 ***
(0.203)
Loca ion (Nai obi) −0.236 **
(0.113)
Social ies −0.345 ***
(0.113)
No sa ing 0.286 **
(0.123)
Educa ion (pos g adua e) 1.886 **
(0.775)
Cons an −0.278 **
(0.125)
χ2(8) 71.77
p- alue 0.000
Obse a ions 8830
Robus s anda d e o s in pa en heses *** p< 0.01, ** p< 0.05.
Table 7. Hosme –Lemeshow, de iance, and AUC goodness o i es s.
G oup P ob Obs_1 Exp_1 Obs_0 Exp_0 To al
1 0.1760 27 27.3 165 164.7 192
2 0.1980 42 37.6 153 157.4 195
3 0.2395 26 40.4 151 136.6 177
4 0.2681 66 51.3 132 146.7 198
5 0.2900 64 67.5 170 166.5 234
6 0.2974 34 33.8 80 80.2 114
7 0.3469 58 59.4 125 123.6 183
8 0.3741 117 117.1 203 202.9 320
9 0.4309 46 49.9 72 68.1 118
10 0.8332 59 54.7 55 59.3 114
Hosme –
Lemeshow chi2(8) 14.48
P ob > chi2 0.0701
De iance Tes
ll(null) −1114.486
ll(model) −1074.841
AIC 2167.682
BIC 2217.364
AUC 70.79%
6.2.2. Decomposing he Con ibu ion o Fo mal and In o mal Finance
The eg ession analysis in Table 6sugges s ha he decision o be sel -employed is a
unc ion o many ac o s, wi h inancing choice being one o hem. Since we ound in o mal
inance o be nega i ely associa ed wi h he choice o be sel -employed, we assessed he
magni ude o he con ibu ion ha his inancing op ion has among di e en g oups o
indi iduals: men and women, e ugees and na ionals, hose li ing in and ou side Nai obi,
hose who can and canno speak na ional languages, and hose wi h and wi hou social
Economies 2025,13, 100 16 o 21
capi al/ ies. By decomposing he di e ences in hese g oups, we can shed ligh on how
much o he a ia ion in he inancing decision can be explained by o he ac o s. As
he employmen a iable is bina y, his s udy employs Fai lie’s (2014) ex ension o he
Blinde –Oaxaca decomposi ion echnique, which decomposes di e ences in p opo ions
based on ei he he p obi o logi model. The analysis calcula es he di e ence be ween he
p edic ed p obabili ies o wo g oups and decomposes i in o explained and unexplained
componen s. In his con ex , we examine how di e en g oups a y in hei likelihood o
choosing sel -employmen , gi en he same inancing op ion.
Economies 2025, 13, x FOR PEER REVIEW 15 o 21
Fo obus ness and he goodness o i , he s udy used he Hosme –Lemeshow and
de iance es s o assess he gene al i . Fo he de iance es wi h he null hypo hesis ha
he model i s he da a well, Table 7 p edic s he log-likelihood o he null model o be
−1114.486 and he log-likelihood o he i ed model wi h p edic o s o be −1074.841,
which is highe , indica ing i i s he da a be e han he null model. In addi ion, he p-
alue o he Hosme –Lemeshow es is g ea e han 0.05, indica ing a good i . The Re-
cei e Ope a ing Cha ac e is ic (ROC) cu e in Figu e 3 also plo s he T ue Posi i e Ra e
(TPR) agains he False Posi i e Ra e (FPR) a a ious h eshold le els, showing a mode -
a ely ai p edic i e abili y. The A ea Unde he Cu e (AUC) s a is ic, which p o ides a
holis ic iew o he model’s pe o mance, is 70.79%, showing a good classi ie o he
model.
Table 7. Hosme –Lemeshow, de iance, and AUC goodness o i es s.
G oup P ob Obs_1 Exp_1 Obs_0 Exp_0 To al
1 0.1760 27 27.3 165 164.7 192
2 0.1980 42 37.6 153 157.4 195
3 0.2395 26 40.4 151 136.6 177
4 0.2681 66 51.3 132 146.7 198
5 0.2900 64 67.5 170 166.5 234
6 0.2974 34 33.8 80 80.2 114
7 0.3469 58 59.4 125 123.6 183
8 0.3741 117 117.1 203 202.9 320
9 0.4309 46 49.9 72 68.1 118
10 0.8332 59 54.7 55 59.3 114
Hosme –Lemeshow chi2(8) 14.48
P ob > chi2 0.0701
De iance Tes
ll(null) −1114.486
ll(model) −1074.841
AIC 2167.682
BIC 2217.364
AUC 70.79%
Figu e 3. ROC cu e plo ing he T ue Posi i e Ra e (TPR) (do ed line) agains he False Posi i e
Ra e (FPR) (g een line).
6.2.2. Decomposing he Con ibu ion o Fo mal and In o mal Finance
Figu e 3. ROC cu e plo ing he T ue Posi i e Ra e (TPR) (do ed line) agains he False Posi i e
Ra e (FPR) (g een line).
The decomposi ion esul s in Table 8indica e ha he coe icien s associa ed wi h
o mal inancing a e insigni ican ; his aligns wi h he logi eg ession indings and likely
e lec s he low numbe o o mal inancing use s in he sample. Since mos e ugees ely
on in o mal inancial sou ces, o mal inancing’s ole in d i ing sel -employmen may be
limi ed. The esul s highligh signi ican a ia ions ac oss demog aphic g oups, empha-
sizing how s uc u al and ins i u ional ac o s shape sel -employmen oppo uni ies. Fo
ins ance, women who choose in o mal inancing a e 25% less likely o be sel -employed
han compa able men; his sugges s ha , despi e accessing in o mal c edi , women ace
addi ional cons ain s, such as limi ed business ne wo ks, cul u al no ms es ic ing mo-
bili y, and sec o al seg ega ion in o lowe -p o i ac i i ies. The inding aligns wi h he
li e a u e showing ha women, pa icula ly e ugee women, o en engage in smalle -scale,
home-based businesses due o social and economic cons ain s.
Table 8. Fai lie decomposi ion esul s.
Va iable Gende
Na ionali y
Language Loca ion Social Ties
No Fo mal/In o mal
−0.341 *** 0.806 ** 0.273 * −0.492 *** −0.259 **
(0.853) (0.368) (0.161) (0.134) (0.103)
Fo mal −
6.26
×
10
−20−0.115 −0.188 0.633
(0.135) (0) (0.404) (0.461) (0.727)
In o mal −0.247 *** 0.798 ** 0.266 −0.145 *** −0.264 **
(0.633) (0.375) (0.166) (0.411) (0.110)
Obse a ions 8830 8830 8830 8830 8830
Robus s anda d e o s in pa en heses *** p< 0.01, ** p< 0.05, * p< 0.1.
Re ugees using in o mal inancing a e 80% mo e likely o be sel -employed han
Kenyan na ionals; his unde sco es he lack o o mal employmen oppo uni ies o
e ugees, pushing hem owa d sel -employmen . Howe e , legal and ins i u ional ba ie s
such as es ic ions on business egis a ion, p ope y owne ship, and inancial se ices
access may limi hei abili y o scale up businesses. Responden s esiding in Nai obi and
Economies 2025,13, 100 17 o 21
using in o mal inancing a e 15% less likely o be sel -employed han hose in Naku u
and Mombasa; his may e lec highe compe i ion, highe cos s o li ing, and s ic e
en o cemen o e ugee- ela ed business egula ions in Nai obi compa ed o smalle u ban
cen e s whe e egula o y sc u iny is lowe . Indi iduals wi h s ong social ies who use
in o mal inancing a e 26% less likely o be sel -employed. While social ne wo ks acili a e
access o in o mal c edi , hey may also ein o ce economic dependency o lead o inancial
obliga ions (e.g., emi ance expec a ions), educing he esou ces a ailable o business
in es men . Addi ionally, e ugees wi h s ong social ne wo ks may ely on communi y
suppo a he han sel -employmen o su i al.
7. Conclusions and Policy Recommenda ions
Re ugees’ inancing decisions a e speci ic due o hei di e se challenges, anging
om in o ma ion asymme ies due o hem being in a o eign coun y and en i onmen
o language ba ie s and legal documen a ion. In a well-de eloped inancial sys em like
ha o Kenya, one expec s access o o mal inancing o be ela i ely easy and accessible.
Howe e , ma ke ailu es o ce indi iduals and households o choose in o mal inancing o
complemen and some imes subs i u e o o mal inancing.
Using da a om he 2021 Socioeconomic Su ey o U ban Re ugees in Kenya, his
s udy sough o in es iga e he ela i e con ibu ions o o mal and in o mal inance o
he decision o unde ake sel -employmen , wi h a speci ic ocus on in es iga ing d i e s
o e ugees’ inancing decisions and hei decision o be sel -employed o engage in o he
wage-paying employmen . Findings in his s udy sugges ha inancing decisions depend
on cogni i e cha ac e is ics such as e ugee s a us, social capi al, abili y o communica e
in na ional languages, and supply ac o s, including he loca ion o he household. On
he o he hand, he choice o be sel -employed is ela ed o inancing choice, gende , lan-
guage(s) spoken, loca ion/ esidence o he esponden , social ies/capi al, sa ing p ac ices,
and educa ion.
As policymake s s i e o ensu e ha e ugees access highe educa ion o enhance
he c ea ion o jobs, he e should also be e o s o o e aining o de elop luency in
he na ional and o icial languages, acili a e hei in eg a ion in o Kenyan socie y, and
p o ide mo e employmen op ions. Language aining p og ams ha enhance e ugees’
and non-na i e speake s’ command o na ional languages can imp o e hei employmen
p ospec s and business ne wo king. In addi ion, cou ses speci ically aimed a he language
skills needed o inancial managemen , cus ome in e ac ion, and o mal employmen may
also be de eloped. Re ugees in Nai obi a e also less likely o engage in sel -employmen ,
aising a need o designa e mic o-en e p ise- iendly zones in u ban a eas whe e e ugee
en ep eneu s can ecei e educed en , ax incen i es, and logis ical suppo , os e ing a
conduci e en i onmen o sel -employmen .
The decomposi ion esul s also sugges ha in o mal inancing has explana o y powe
o e an indi idual’s choice o be sel -employed. Responden s using o mal inancing we e
signi ican ly ewe in he s udy sample, possibly because in o mal inancing sou ces a e
gene ally mo e accessible o e ugees han o mal inancial ins i u ions, especially ega ding
colla e al equi emen s, c edi his o ies, o o mal employmen . The accessibili y o in o -
mal inancing lowe s en y ba ie s o sel -employmen since in o mal lende s o e mo e
lexible e ms han o mal lende s, making hem appealing o indi iduals wi h i egula
income s eams. This lexibili y can encou age indi iduals o pu sue sel -employmen wi h-
ou he cons ain s imposed by banking equi emen s. Conside ing he lowe in e es and
long- e m ad an age o o mal inance, policies ha acili a e documen a ion o wo k pe -
mi s o e ugees should be acili a ed o allow e ugees o engage mo e easily in economic
ac i i ies. Policymake s can also design mic o inance p oduc s wi h lexible epaymen
Economies 2025,13, 100 18 o 21
schedules and small loan sizes o ca e o e ugees’ i egula income pa e ns o loans ha
do no equi e colla e al bu a e backed by social gua an ees o g oup lending mechanisms,
hus le e aging us wi hin e ugee communi ies; his can be combined wi h small g an s
o i s - ime en ep eneu s o educe isk and encou age business es ablishmen .
F om he indings, e ugees wi h s ong social capi al/ ies a e less likely o emb ace
sel -employmen ; his can be con ex ualized o sugges ha e ugees build ne wo ks ha
lead o wage employmen a e building ies wi h o he membe s h ough he o ma ion
o associa ions. By p omo ing o malized sa ings g oups, coope a i es, o communi y
in es men p og ams, policymake s can con e social ne wo ks in o economic suppo
sys ems, which migh boos en ep eneu ial ac i i y wi hou excessi e eliance on social ies
alone. Banks can also be mobilized o es ablish loaning sys ems ha p o ide inancing o
e ugee associa ions, which ha e in o ma ional ad an ages o e e ugee households, and,
in u n, can loan o he e ugees o unde ake business. They can also pa ne wi h exis ing
communi y sa ings and loan associa ions (CSLAs), ROSCAs, o diaspo a inancing g oups
o ex end o mal inancing op ions. This pa ne ship could in ol e p o iding aining o
ma ching unds o ampli y he impac o hese in o mal mechanisms.
This s udy also inds ha men a e mo e likely o ake up inancing han women.
This unequal access o inancial esou ces, social suppo , and en ep eneu ial ne wo ks
may cause a pe sis en gende gap in economic pa icipa ion. We ecommend c ea ing
a i ma i e policies encou aging women o access inancing and emb ace sel -employmen
as an income-gene a ing ac i i y. Mic o inance p og ams o women should be es ablished
o expanded, o e ing ailo ed inancial li e acy, men o ing, and capi al access o b idge
he gende gap. Policy ad oca es should also collabo a e wi h local go e nmen s o c ea e
policies incen i izing inancial ins i u ions o se e e ugee popula ions, such as ax b eaks
o subsidies.
S udy Limi a ions and A eas o Fu he Resea ch
This s udy ocused exclusi ely on seconda y da a a ge ing he u ban na ionals and
e ugees in Nai obi, Naku u, and Mombasa, egis e ed wi h UNHCR. Due o he COVID-19
social dis ancing measu es, he da a we e collec ed h ough compu e -assis ed elephone
in e iews; his may esul in bias because some segmen s o he popula ion may ha e
been excluded, such as hose wi hou phone access, hose unwilling o answe calls, o
hose no egis e ed wi h he UNHCR. Because o his, he indings may no p o ide
a comp ehensi e unde s anding o o mal and in o mal inancing mechanisms ac oss
di e en segmen s, con ex s, and loca ions. U ban se ings may p esen unique challenges
and oppo uni ies no ep esen a i e o u al a eas, whe e inancial beha io s and access o
esou ces can di e .
In addi ion, he s udy sample had e y ew esponden s using o mal inancing,
which es ic s he abili y o conduc obus compa a i e analyses be ween hose who use
o mal mechanisms and hose who ely on in o mal inancing; his limi s insigh s in o
he ela i e ad an ages, challenges, and ou comes o each inancing pa hway. As a esul ,
he conclusions d awn om his esea ch migh be limi ed in scope. They may no be
gene alizable o all e ugee o na ional popula ions, especially in egions o con ex s whe e
o mal inancing is mo e p e alen and whe e he dynamics o sel -employmen migh
di e signi ican ly om hose obse ed in his s udy.
The e o e, u u e esea ch should inco po a e da a om u ban and u al households
o allow o a deepe explo a ion o he in e play be ween loca ion and access o inancial
se ices, yielding mo e b oadly applicable insigh s ac oss di e en geog aphic and socioe-
conomic se ings. In addi ion, mo e esponden s should be included using o mal inancing,
possibly h ough pu posi e sampling s a egies a ge ing his g oup; his will p o ide a
Economies 2025,13, 100 19 o 21
mo e holis ic and nuanced analysis o he inancing dynamics among e ugees. The e is
also a need o ocus on compa a i e s udies o inco po a e e ugees om di e en cul u al
backg ounds o compa e coun ies wi h inclusi e e sus es ic i e inancial policies o
e ugees in o de o assess hei e ec on sel -employmen ou comes. Fo us o ack he
long- e m impac s o inancing choices on business g ow h, sus ainabili y, and economic
in eg a ion among e ugees and na ionals, a longi udinal s udy o panel da a analysis
should be conduc ed o de e mine hese dynamics.
Funding: This esea ch was unded by he A ican Economic Resea ch Conso ium in g an num-
be RS23503, in he con ex o he Wo ld Bank p ojec on Kenya’s Analy ical P og am on Fo ced
Displacemen (KAP-FD).
In o med Consen S a emen : In o med consen was ob ained by he Wo ld Bank om all subjec s
in ol ed in he s udy a he da a collec ion s age.
Da a A ailabili y S a emen : Can be accessed a h ps://mic oda a.wo ldbank.o g/index.php/ca alog/
5304#:~: ex =As%20 he%20 hi d%20o %20a, he%20 ecen %20go e nmen %20announcemen %20 o,
accessed on 2 June 2023.
Acknowledgmen s: I since ely hank he A ican Economic Resea ch Conso ium and he Wo ld Bank
o hei gene ous unding, which made his esea ch possible. I am also deeply g a e ul o Tomson
Ogwang, Rosema y A ieno, E ick Nyambedha, and Ge mano Mwabu o hei in aluable inpu
and con ibu ions o he o e all s uc u e o his s udy, including i s me hodology. Thei insigh s,
guidance, and suppo g ea ly en iched his wo k.
Con lic s o In e es : The au ho decla es no con lic s o in e es .
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Disclaime /Publishe ’s No e: The s a emen s, opinions and da a con ained in all publica ions a e solely hose o he indi idual
au ho (s) and con ibu o (s) and no o MDPI and/o he edi o (s). MDPI and/o he edi o (s) disclaim esponsibili y o any inju y o
people o p ope y esul ing om any ideas, me hods, ins uc ions o p oduc s e e ed o in he con en .
