Reintegration good practices #9 - Boosting returnees’ employment through support to SMEs in Iraq

The Enterprise Development Fund (EDF) encourages rapid, large-scale private sector job creation and economic recovery through tailored support to Small and Medium Enterprises (SMEs). Implemented by IOM in Iraq since 2018, the EDF is a financing mechanism that provides SMEs with financial capital to contribute to their recovery and/or expansion. It targets SMEs that were successful prior to the conflict with the Islamic State in Iraq and the Levant (ISIL) but suffered loss and damage and have a high demand for labour force that can be matched by various types of beneficiaries, including returning migrants.

The EDF is fit-for-purpose in the context of Iraq, where 60% of jobs are in the private sector, the majority of which are in SMEs. At the same time, most SMEs have experienced large scale destruction or loss and lack access to finance to rebuild. This is especially challenging as access to credit in Iraq is limited to non-existent, making it very difficult for these businesses to find funds to recover. The EDF addresses the critical gap that SMEs face in accessing finance for rehabilitation and expansion, while at the same time contributing to improve employment avenues for returnees and other target groups.

As compared to more individual job insertion and employment support interventions whereby returnees are supported to improve their employability through skills development and to find opportunities through job matching activities, the EDF approach represents a successful way to reintegrate through employment from a more structural lens, by structurally creating jobs that can be matched with specific beneficiary profiles such as returnees.

EDF is easy to scale-up and to replicate with adaptation to the local context.