Baidoa, the largest city in Somalia’s South West State, hosts an estimated 500,000 internally displaced persons (IDPs) living in overcrowded settlements with limited access to livelihoods, infrastructure and essential services. For its residents, the large IDP population places heavy pressure on displacement-affected communities (DACs), stretching already limited basic services and increasing competition for jobs, land and natural resources.

Ms. Qamar Sahal Mohamed, a lifelong resident of Baidoa, Somalia exemplifies the resilience and leadership demonstrated by women entrepreneurs all over the world, but especially those in displacement-affected communities. A mother of 13, her life changed dramatically when, in 2013, her husband suffered a stroke that left him unable to work. Overnight, she became the sole provider for her large household, assuming full responsibility for their economic well-being.

Ms. Qamar with her team at the Farjano Oil and Cereal factory, ©2025 UNDP Somalia/Somali Storytellers

“We had a six-hectare farm which had long sustained us through fruit and vegetable production. After my husband suffered a stroke and could no longer work, I quickly recognized that farming alone could not meet my family’s changing needs,” says Qamar.

Baidoa’s economy is largely agro-pastoral, with crop production — especially sorghum and maize — and livestock trade comprising the main sources of livelihood. The city serves as an important commercial hub, linking surrounding rural areas to urban markets in southern Somalia, despite the ongoing challenges related to displacement, limited infrastructure and insecurity. Small and medium enterprises (SMEs) play a vital role in sustaining the local economy by providing employment, supporting value chains, and ensuring the availability of essential goods, such as food, livestock products and pharmaceuticals, as well as basic services such as electricity, water and waste collection.

Noting a consistent demand for locally produced cooking oil, Ms. Qamar invested in a small processing machine and began producing sesame, peanut, coconut and sunflower oils. She personally sourced raw materials, processed the oils, and built a loyal customer base that valued the quality, consistency and reliability of her products.

As her reputation for high quality oils grew, she reinvested her earnings in a grain-grinding machine, enabling her to diversify into maize, sorghum and wheat flour milling. This expansion positioned her as a key supplier for households and small retailers within Baidoa. However, recurring droughts and unstable raw material prices created significant operational challenges.

“Without sufficient working capital to purchase inputs in bulk, I frequently faced production interruptions,” says Qamar.

Ms. Qamar, like many of Baidoa’s current and aspiring entrepreneurs, faced persistent barriers that limits business growth, including restricted access to finance, limited business training, weak market linkages and climate-related production shocks

To address these obstacles, in 2022, the United Nations Development Programme (UNDP) partnered with the South West State Chamber of Commerce and a local financial institution to pilot SME finance in displacement-affected communities. Its aim is to strengthen Baidoa’s economic development by providing entrepreneurs — from retailers to small scale farmers, agribusiness to hospitality — with the skills, capital and support systems needed to grow their businesses and create jobs.

In 2023, Ms. Qamar applied for and completed the business management training developed for the pilot. Out of 80 applicants, she was among the 25 selected for the training and later among the 16 entrepreneurs who successfully met all the requirements for financial support. Following the training, her business profile was submitted to a local bank, and after providing national identification and securing a guarantor, she was approved for US$50,000in Shariah-compliant financing with a 6 percent markup over 24 months.

“Supporting SMEs like mine means supporting the backbone of our economy. Women face real barriers, yet we drive change when empowered,” says Ms. Qamar Sahal Mohamed.

The financing marked a turning point for Ms. Qamar’s enterprise, Farjano Oil and Cereal. With adequate working capital, she began purchasing raw materials in bulk, thereby eliminating production gaps and significantly increasing output. Daily oil production rose from 3–4 jerricans to 6–7, enabling her business to supply approximately 180–200 jerricans per month. Her flour milling capacity expanded in parallel, allowing her to serve major Somali markets including Mogadishu, Garowe, Galkayo and Bosaso, as well as occasional export orders to nearby Kenya and Ethiopia. “I was able to repay the entirety of the loan within the two-year period,” says Qamar.

In addition to the business’ growth, Ms. Qamar’s enterprise has had a significant impact on the community. Today, she employs 30 workers, 24 who are IDPs, most of them women. Drawing on her own experience as a woman entrepreneur, she deliberately prioritizes IDPs, recognizing that stable employment is essential to restore dignity, reduce dependence on humanitarian assistance, and enable families to rebuild their lives. Several of her employees have since achieved their own financial independence, enrolled their children in school, and have stable incomes for the first time in years.

Looking ahead, Ms. Qamar plans to expand Farjano by investing in solar energy to reduce operational costs, revitalizing her six-hectare farm to diversify production, and acquiring a delivery vehicle to improve distribution efficiency. She also continues to champion women’s entrepreneurship in Baidoa.

About the initiative:

The SME financing provided to Ms. Qamar is part of the Saameynta Programme — a joint UN initiative of UNDP, IOM and UN Habitat funded by Netherlands, Norway and Switzerland through the Somalia Joint Fund (SJF) — to support the Federal Government of Somalia in their goal to achieve durable solutions for an estimated 2.6 million displaced people within the country.

Forced displacement, drought, and closure of refugee camps in neighbouring countries have further exacerbated the displacement situation. This project recognises that displacement is a barrier to the improvement of living conditions of the people that experience its misery and prevents those groups to seize opportunities that, if made available to other poor social groups, would enable them to improve their situation over time. Therefore, addressing protracted displacement in Somalia is an imperative and urgent priority. The Saamaynta (Impact) project addresses Somalia’s internal displacement challenges in an innovative manner, seeking durable solutions that are affordable and sustainable through addressing specific inter-related systemic blockages, challenges, and opportunities.