From hardware to hard times… and back

UNDP and UNIDO support small businesses in Baidoa as part of the project, funded through the Somalia Joint Fund by Switzerland, the Netherlands and Norway

May 10, 2023

Abdisalam Sheikh Ali, a local businessman and community leader at his livestock farm in the outskirts of Baidoa, Somalia

Everyone knows Abdisalam Sheikh Ali. Not just because he’s a local businessman and community leader, but because he was always ready to lend a hand to his neighbours whenever flooding or drought made life hard – something that happens all too often in his hometown of Baidoa, in Somalia’s Southwest State, where climate change has made drought almost 100 times more likely

Then, in 2020, came COVID and suddenly Abdisalam needed a helping hand himself. During nine months of lockdown, customers disappeared from his hardware store in the city market, and his income went with them, leaving nothing to feed his family, including 23 children. 

“We lost everything during the lockdown,” he explained. “I used to be able to feed all the children and pay their school fees, but we’ve been struggling ever since.”

With his shop gone, Abdisalam moved to the outskirts of town and turned to small-scale livestock farming – the traditional livelihood of many in Somalia, where some 4 out of 5 people are involved in agriculture or herding. It was just enough to get by, but always there was the dusty wind in the air and the threat of another drought that could destroy his small herd. A businessman like Abdisalam wanted to do better. He wanted to be secure.

So, he turned to the Baidoa Enterprise Development Unit (EDU), an organisation set up by UNIDO that offers training and business development support to local enterprises. This EDU is partly funded by the UN’s Scaling-Up Solutions to Displacement in Somalia (Saameynta) project, implemented by UNDP, UN Habitat and IOM. The Saameynta project’s main aim is to reduce the number of people living in forced displacement by providing large-scale durable solutions suited to urban environments in three Somali cities.

Under the Saameynta project, UNDP supports the local economic development of IDPs and host communities to build community resilience, foster inclusive economic growth and enhance livelihood opportunities for IDPs and host communities alike.

After getting support from the EDU, Abdisalam was in a better position to meeting the conditions required for a loan. “I applied to the UNDP-UNIDO credit facility to expand my livestock business and invest in more modern technology, he explained. “Now I supply Baidoa with milk and meat and also breed animal for local markets. I am expecting the money to come rolling in this year so I can look after my family and pay back the bank.” 

The funding also helped Abdisalam hire three IDPs and one returnee to work for him.  

The UNDP-UNIDO credit facility provides Sharia-compliant loans and micro-credit for enterprises benefiting IDPs and host communities. UNDP also partners with UNIDO and the EDU to support capacity-building, skill development and sustainable business models for IDPs and host communities.

Since 2022, UNDP’s funding for the credit facility has supported 24 small businesses with training and business counselling in Baidoa, of which 14 were women owned. Loans totalling US$300,000 have already been disbursed and a further US$387,000 is in the pipeline. A further US$150,000 will be added to the credit facility by the Saameynta project in 2023 to support up to 10 additional businesses. The work is funded through the Somalia Joint Fund by the Swiss Agency for Development and Cooperation (SDC), the Government of the Netherlands and the Norwegian Ministry of Foreign Affairs