Social Capital, Structural Holes, and entrepreneurship: A study on refugees entrepreneurship in Kenya

In the past decade the refugee population has more than doubled with more than 89 million people forced to flee their homes. Kenya presents a unique context through its encampment policy by which more than 500,000 refugees and asylum seekers are put in refugee camps in rural parts of the country under restrictions of movement and lack of rights to work. While refugees in institutionalised camps are constrained to live under limited social and economic rights but nevertheless enjoy some protection under the auspices of humanitarian agencies, refugees and asylum seekers residing in urban setting they are stripped of this protection and effectively left to fend for themselves. Despite these constraints and restrictions, refugees over the years have become an asset, generating economic activity in the camp locations through entrepreneurial activity. Out of necessity, refugees have featured among the most enterprising and entrepreneurial in some of these locations. With declining humanitarian funding and growing number of displaced populations, stakeholders have proposed a new model of intervention that emphasizes a self-reliance pathway to long-term resilience and livelihood recovery. This approach, it is argued, would provide refugees with the opportunity to use their talents and skills to support themselves towards livelihood recovery.
This study investigated mobilisation of social capital in entrepreneurship among refugees using a mixed method approach. A survey was administered to 418 entrepreneurs and semi-structured interviews conducted with 24 stakeholders across three locations in Kenya. Through regression analyses of the questionnaire data and thematic analysis of the interviews, the study revealed the importance of social networks forged through bonding and bridging forms to refugees toward entrepreneurial success and improved livelihood outcomes. The study finds that that family, friends, and bridging networks are crucial in mitigating resource and spatial constraints for refugee entrepreneurs, allowing them to engage in entrepreneurship. On the other hand, while assessing the level of trust among refugees and formal institutions, linking social capital was found to have no significant relationships on entrepreneurial success and a significant but negative relationship on livelihood outcomes. The study finds low level of trust toward the government is likely attributed to limited interaction and communication between the two groups; as a result, refugees are unable to acquire business-critical resources or information. However, when linking social capital is moderated by entrepreneurial skill it was found to have a significant but negative effect on entrepreneurial success. Despite this, the findings suggest that refugee entrepreneurial skills compensate for the difficulty of gaining access to resources and information. While there exists a higher level of trust and interaction with multilateral agencies this is found as only useful in the short term, as refugee entrepreneurs rely on humanitarian assistance for basic needs for daily survival, nevertheless, crucial to the continuity and success of their entrepreneurial activity. In terms of policy and practical implications This study makes several important contributions. It offers empirical evidence to support the predictive relationship of social capital on refugee entrepreneurship. It also contributes toward entrepreneurship, bricolage, and social capital theories by providing insights on how the three forms of (bonding, bridging and linking) social capital enhance entrepreneurial bricolage for refugees. The study offers practical implications for refugees who are looking to enhance strategies for overcoming barriers, to local and multilateral agencies looking to further engage refugee entrepreneurs and the wider society in wanting to understand refugee entrepreneurship contexts. Finally, the study contributes toward policy, as the refugee crisis soars and host nations resources get stretch, entrepreneurship provides an opportunity as a durable solution toward addressing forced displacement. Therefore, it may be effective for policymakers to understand the experiences and contributions of refugee entrepreneurs. In doing so they challenge prevalent assumptions and develop policy for a common approach to promoting the socioeconomic inclusion of refugees that recognises their social and economic contributions.