A refugee livelihood programme that combines entrepreneurship support with market access has significantly reduced extreme poverty among refugees and host communities in Uganda and Ethiopia, according to new evidence from two randomized controlled trials. Researchers say the programme offers a cost-effective model for reducing poverty and aid dependence in refugee settlements, prompting fresh funding commitments worth nearly $11 million for its expansion.
Two randomized controlled trials (RCTs) of the DREAMS (Delivering Resilient Enterprises and Market Systems) program, implemented by Village Enterprise and Mercy Corps, found that participating households saw meaningful economic gains within a year, even in some of the world’s most challenging refugee settings.
The studies assessed the impact of the DREAMS (Delivering Resilient Enterprises and Market Systems) programme, implemented by the organizations Village Enterprise and Mercy Corps, in some of East Africa’s largest refugee settlements. Independent evaluator IDinsight found that households participating in the programme recorded substantial economic improvements within a year of completing the intervention.
In Uganda, participating households increased monthly consumption by 17 percent, while households in Ethiopia registered a 9 percent increase. Savings more than doubled in both countries, and household assets rose by between 20 and 24 percent compared to non-participating households.
The programme reached more than 22,000 households in Uganda’s refugee settlements of Bidi Bidi Refugee Settlement and Rhino Camp Refugee Settlement, as well as refugee communities in the Dollo Ado area of Ethiopia. Researchers say the findings are particularly significant at a time when humanitarian funding is declining globally. The results suggest that helping refugees establish businesses while strengthening links to local markets can reduce dependence on aid and improve long-term economic resilience.
Under the programme, participants receive business training, seed capital, mentorship, and are organized into savings groups.
Mercy Corps also connects entrepreneurs to private-sector actors in sectors such as poultry, sunflower, soybean, sesame, and livestock production, helping them access markets and expand their businesses. Participants reported improvements in food security, education, and household welfare. Many households used increased earnings to purchase nutritious foods, pay school fees, invest in livestock, improve housing, and acquire productive assets.
The evaluation found that if the gains are sustained for five years, the programme could generate economic benefits worth approximately twice its implementation costs through increased consumption and asset accumulation. The positive results have attracted continued donor support. The IKEA Foundation has committed $7.4 million to support the next phase of the programme in Ethiopia, while the Conrad N. Hilton Foundation has pledged $3.5 million for expansion in Uganda through 2029.
Programme leaders argue that the model offers a practical response to the growing challenges of displacement driven by conflict and climate change. Sazini Mojapelo, Chief Executive Officer of Village Enterprise, said the findings demonstrate that refugees and host communities can build sustainable livelihoods when given access to business opportunities, skills, and financial support.
Barri Shorey, Senior Program Officer, Refugees, Disasters, and Aviation at the Conrad N. Hilton Foundation, said: “DREAMS demonstrates the power of investing in long-term economic solutions for refugees and host communities. We’re proud to support the next phase of this work in Uganda because the model helps families build sustainable livelihoods, strengthen household stability, and create healthier futures for their children—a true two-generation approach! Integrating DREAMS with early childhood development efforts across East Africa creates an opportunity to support caregivers and young children together, helping families build more secure and productive futures.”
The evaluation adds to a growing body of evidence supporting economic inclusion approaches for refugees, with researchers describing the results as among the strongest evidence yet that entrepreneurship and market systems development can improve welfare in displacement settings.
The evaluation was conducted in refugee settlements in Uganda and Ethiopia between 2022 and 2026 and involved more than 12,000 programme participants and over 12,000 comparison households. Researchers plan a follow-up survey in Uganda later this year to assess whether the gains in income, consumption, and asset ownership are sustained over the longer term.
Village Enterprise’s mission is to end extreme poverty in rural Africa through entrepreneurship, innovation, and collective action. Village Enterprise has started over 119,000 businesses and positively transformed the lives of over 2.3 million people in Ethiopia, Kenya, Rwanda, Uganda, Congo-Brazzaville, the Democratic Republic of the Congo, Madagascar, Mozambique, Nigeria, and Tanzania-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
