Challenges and strategies

There are specific challenges that refugees may be likely to encounter in becoming self-employed, as well as the common challenges such as changes in benefits and accessing finance.

Entitlement to work – asylum seekers and refugees
One of the first steps for you is to find out about the status of your clients, as this will affect their ability to work as well as to set up in business. In most cases, asylum seekers are not entitled to work, whereas refugees are. Asylum seekers are defined as people who have left their country of origin, have applied for recognition as refugees in another country and are awaiting a decision on their asylum claim. If an asylum claim is approved, the person will be granted refugee status.

The 1951 UN Convention on the status of refugees, defines refugees as:

Being outside his/her country of nationality or habitual residence;
Having a well-founded fear of persecution for reasons of race, religion, nationality, political opinion or membership of a particular social group; and
Being unable or unwilling to avail himself or herself of the protection of that country or to return there, for fear of persecution.

Once someone has been granted refugee status in the UK, he or she has leave to remain for five years, at which point the case will be reviewed. Where refugee status is not granted, your client may qualify for humanitarian protection for up to five years or Discretionary Leave to Remain for up to three years. In both cases, your clients will have full employment rights and be able to access mainstream services.

English language skills
English language and literacy skills can be vital in enabling refugees to realise their business ideas. These skills will help your clients to understand legislation and business regulations, communicate with customers and potential customers and increase the sustainability of their businesses. Existing English language and literacy skills will vary, depending on the client’s country of origin and gender. In some countries, women may have little formal education and low levels of literacy in their first language. For instance, in one sample, 59 percent of Somali women compared with 90 percent of Somali men were fluent in reading Somali.

One of your roles will be to identify and direct your refugee clients to English language classes that meet their language and literacy needs. Most English classes are pitched at a basic level, for social and conversational purposes rather than business English. You can find out about English language courses from the local authority websites under Education. This should also give information on adult education and local colleges and community organisations which run training courses in English such as ESOL (English for Speakers of Other Languages) and EAL (English as an Additional Language). For example, visit www.westking.ac.uk, the website for Westminster Kingsway College or www.candi.ac.uk, the website for Camden and Islington College. Many courses may be free, depending on residency in the borough or whether your clients are in receipt of benefit.

Local authority websites also advertise Family Learning courses, where parents can learn English along with their children. This may be particularly helpful for parents where childcare is difficult to organise or expensive. Some family learning courses may provide a crèche facility or childcare support.

Business skills training
It is likely that your refugee clients will be unfamiliar with the business framework of the UK, such as company law. It will probably be helpful to your clients to develop their business skills in such matters as accounting, book-keeping, IT and marketing. Free and low-cost business skills training should be available locally. You can find out about these through mainstream business advice organisations such as:

Greater London Enterprise (www.gle.co.uk).
Portobello Business Centre (www.pbc.co.uk).
East London Small Business Centre (www.goeast.org).
Business Link London (www.businesslink.gov.uk). All Business Link London events are free at the time of writing.
Local authority training opportunities. Many adult education centres provide free and low-cost training courses on business-related areas, such as Lewisham Council Opening Doors.
Adult education courses (www.floodlight.co.uk). Available courses in the area can be identified by your client’s postcode.

Accessing business finance
A specific issue affecting refugee entrepreneurs relates to Muslim communities and interest payments on loans. Islamic law prevents the payment or charging of interest, which means that many of the usual sources of finance for business start-up and support are not possible.

In the circumstances, the possibility of grants and peer lending should be considered. In many Muslim communities and countries, peer lending is regarded as a route to funding business development whilst avoiding interest payments. In the Somali community this is known as ayuuto or hagbad and is commonly practised by women. Generally speaking, it is a savings and loans system amongst a group of people, whereby everyone in the group periodically contributes a certain amount of money, with each person in turn receiving the total amount at regular intervals. It may be that your clients will be able to find out more about a peer lending system in their area through their local community groups.

For general guidance on accessing business finance, including grants, please see Financing under the Themes section.