The strength of small business: small business grant programme survival rates and network effects in Syria

Abstract While recent contributions to the development literature suggest that the provision of small business grants, even accompanied by training, may not be a cost-effective means of achieving development outcomes, this article provides evidence that such provision may be cost-effective in relation to humanitarian outcomes, especially in the absence of economic growth. Since 2016, the International Committee of the Red Cross, in partnership with the Syrian Arab Red Crescent Society, provided 1000 Swiss franc grants to conflict-affected Syrian households to establish small businesses. The objective was to increase household income such as to meet essential needs. In 2023, an evaluation assessed the programme’s medium-term impact by examining businesses that had received support at least 2 years prior. The findings show a 2-year survival rate of 80% and a 5-year rate of 47%. Those households continuing their small business activity were found to have an average annual income of 17 million Syrian pounds, entailing they were just able to meet their essential needs. Beyond income generation, all supported households, regardless of whether they were continuing their small business activity or not, were found to be benefiting from increased market network participation, improving their access to economically advantageous information. Notably, as network theory suggests, it was acquaintance interactions, rather than the stronger relationships with family and friends, that seems to be the primary source of novel economic information. These results suggest that in the presence of a robust informal sector, small business grants can have a significant positive impact on household resilience, even where the macro-economic conditions are poor.