Legal barriers for refugees to form cooperatives

In most countries in which PROSPECTS operates, there aren’t any specific laws that include or exclude refugees from forming or joining cooperatives. In the absence of an affirmative law or policy, there is a risk that cooperatives may not meaningfully engage refugee members, or that refugee-led cooperatives may not be recognized formally. In other instances, policies and procedures to register cooperatives were underdeveloped, making it difficult for cooperatives or social enterprises to acquire regulatory support.

Tip: Where the political context allows, having refugees explicitly mentioned in Cooperative Bills and Laws will remove uncertainty over legality and reduce defacto exclusion from services.

Capacity for growth and formalization

Weak institutional capacity of apex cooperative organizations and other supporting entities can hinder effective functioning and growth. Where such organizations lack strong leaders, there may be a disconnect between cooperative needs and the services provided. Transitioning from informal community groups to formally registered cooperatives requires strong administrative and advisory support.

Tip: Apex organizations are increasingly under pressure to modernize serviced through digitalization. While capacity to adopt digital solutions will vary, there is an opportunity to increase engagement with cooperative groups through digitalization. 

Difficulty of building trust

Promoting trust and cooperation between refugees and host communities can be difficult, particularly in contexts of economic hardship and social tensions. In times of heightened economic and social crises, fostering the development of cooperative structures can be difficult.

Tip: Supporting social solidarity economy initiatives during times of unrest can bring communities together to address shared challenges. It is also important to consider how social tension and cohesion varies by locality. Not all localities will experience the same tensions are there are likely to be area of greater cohesion that can be leverages. 

Financial sustainability

Securing long-term financial sustainability for cooperatives remains a challenge, requiring access to finance, effective management and viable business models. Producers cooperatives may generate their own resources, but in volatile contexts, price fluctuations can producers reluctant to agree to set prices. 

Tip: For producer groups, flexible mechanisms can be built into contracts, with periodic reviews, indexing to market benchmarks and clauses that allow for shared risk in the event of sudden change.