Abstract:
Considering refugees' employment challenges in their host countries, they often need to create jobs by starting ventures and embracing self-employment. However, this requires financing. This study seeks to assess the roles of formal and informal financing in self-employment while also looking at the drivers of financing decisions and self-employment among refugees in an urban setting. Using the extension of the Blinder-Oaxaca decomposition pioneered by Fairlie, this study found informal financing to be significantly associated with an individual's decision to be self-employed, while formal financing is not. Male refugees who access informal financing have a higher probability of embracing self-employment than refugee women and Kenyan nationals; this calls for actions that encourage forming community-based organizations that promote affirmative action and steer the use of informal finance.
