The SMILES project, implemented in Uganda’s Kyaka II and Kyangwali refugee settlements, offers an opportunity to explore how integrating market systems development (MSD) and the graduation approach can potentially improve the livelihoods of ultra-poor refugee and host-community households. In this article—the first in a SMILES Learning Series that will analyze the key findings, challenges, and broader implications of this integrated approach—we provide initial insights on the Graduation + MSD Integration model as the five-year project comes to the end of its second year.
Transforming Lives: The SMILES Project
The Sustainable Market Inclusive Livelihood Pathways to Self-Reliance project (SMILES) operates in the Kikuube and Kyegegwa districts of western Uganda. These regions are home to some of Uganda’s most vulnerable populations, including refugees and members of the host community, who struggle with food insecurity and limited economic opportunities. The project aims to help 14,000 of these households (70,000 individuals) “graduate” from “ultra-poor” status and transition from food insecurity and fragile livelihoods to self-reliance and resilience.
At the heart of the SMILES project is its integration of the graduation approach and MSD. The graduation approach focuses on structured interventions that provide ultra-poor households with the support they need to escape poverty. These programs typically offer a combination of help meeting basic consumption needs, technical and entrepreneurial skills training, asset transfer to kickstart economic activity, and ongoing mentorship in self-reliance.
MSD, on the other hand, focuses on creating sustainable economic opportunities by addressing systemic challenges in market systems. MSD interventions aim to improve market dynamics by strengthening the linkages between various market actors, making it easier for vulnerable populations to participate in and benefit from the market.
By integrating these two approaches, SMILES seeks to create a holistic model that addresses both the immediate needs of households and broader systemic challenges in the market. This integrated approach is particularly relevant in refugee settings, where market systems are often underdeveloped and the needs of the population are urgent.
How Graduation + MSD Integration Works
The SMILES project uses a “push/pull” framework, simultaneously building the resilience of ultra-poor households (push) and stimulating the development of market systems (pull). The graduation program equips households with the skills and assets they need to engage in sustainable livelihoods, while MSD activities work to create a supportive market environment.
A key part of this integrated approach is the use of skills training and demo gardens. In the SMILES project, skills training is not just about imparting knowledge; it is also about building relationships between households and private sector actors (PSAs). The project partners with several PSAs that specialize in different agricultural value chains. These PSAs establish demo gardens and collaborate with community-based trainers to conduct training sessions with participant households. This collaboration allows farmers to build trusted relationships with PSAs, who can continue to provide inputs and market access after the program ends.
Another critical component of the integrated approach is asset transfers. After eight months of graduation activities, households receive one-time cash payments to invest in income-generating activities. These asset transfers are timed to coincide with the establishment of relationships between households and PSAs, so that households are ready and able to invest in productive assets—such as high-quality seeds or agricultural tools—provided by the PSAs.
Key Findings from the SMILES Project
One significant finding from the SMILES project is that the graduation approach provides PSAs with extensive information about the market and key stakeholders. In regions like western Uganda, where refugee settlements are often isolated and difficult to operate in, PSAs face numerous challenges, including establishing relationships with key stakeholders. The SMILES project has found that its relationships with organizations such as the UN High Commissioner for Refugees (UNHCR) and the Office of the Prime Minister are of great value to PSAs. By facilitating introductions and providing market data, the project has helped PSAs operate more effectively and responsibly in these challenging environments.
Another key finding is the importance of community-based trainers and coaches. These individuals, often from the same communities as the project’s participants, bridge the gap between households and PSAs. They help households understand and engage with new market opportunities, and they lend credibility to PSAs, in part because they are seen as neutral parties who do not have a financial stake in the business.
The SMILES project also highlights the need for adapted monitoring, evaluation, and learning (MEL) systems to measure the success of integrated programs. The traditional graduation approach typically focuses on household-level outcomes, while MSD interventions focus more on measuring systemic changes in the market. The SMILES project had to combine both to ensure that its MEL system could accurately measure the impact of its integrated activities.
Finally, the project found that clear communication and expectation-setting with PSAs are crucial for successful integration. PSAs need a robust orientation to fully understand how their interventions fit within the timeline for graduation activities. In the SMILES project, some PSAs were not involved in the preparation for the asset transfer, resulting in lower-than-expected investments by households in PSA-related activities. Future programs can avoid this shortfall by providing PSAs with detailed information sessions that cover the graduation approach, including the timing of key activities such as asset transfers.
Challenges and Opportunities
While the integration of graduation and MSD offers numerous benefits, it also presents several challenges. Aligning the timelines of graduation and MSD activities requires meticulous planning. Working with numerous PSAs, each with its own business model and priorities, can be complex and resource intensive. Developing a MEL system that accurately captures both household- and market-level outcomes is a challenge.
Yet initial learning from the SMILES project offers several lessons for future programs and for future growing seasons. Engaging PSAs early in the process can help align their activities with the timeline for graduation activities and ensure that they are fully prepared to support graduated households. Streamlining communication with PSAs by assigning dedicated liaisons from the program team can reduce the burden on PSAs. Collaborating with PSAs to share relevant data, such as household profiles, can improve targeting and reduce duplication of effort, building stronger relationships between PSAs and participant households.
Conclusion
Throughout Uganda and East Africa, the graduation approach and the MSD approach have often been implemented by different organizations, in different communities, with different funders, and with different expected outcomes—possibly keeping learning siloed (which we explore in more detail here). With its Graduation + MSD Integration approach, SMILES offers an opportunity to share learning with the wider humanitarian and development communities on new approaches to refugee livelihoods’ development. We hope you will follow this SMILES Learning Series as the project continues into Year 3.
