Unlocking Financial Opportunities for 75,000 Refugees
Summary
In 2023, Kiva committed to reaching 75,000 refugees–60% of whom are women– in numerous countries over a two year period with $60m in philanthropically-funded loans and investment capital. Kiva will further deploy evidence-based financial products for displaced communities, focusing on the philanthropic arena and leveraging best practices to drive replication and investment at scale. Across 16 countries in which Kiva’s efforts have already impacted refugee populations and 10 additional ones, the project will enable refugee entrepreneurs to gain access to the capital they need to sustain and grow their enterprises thereby enhancing their economic security.
Approach
Kiva commits to reaching 75,000 refugees (60% of them women) by 2026 with at least $60m in loans funded by both philanthropy and investments to scale evidence-based financial products for displaced communities. To do this Kiva will focus on:
Using philanthropy to support global expansion:
Kiva commits to expanding to new geographies, with new partners, and with new products that better target refugees and respond to their unique needs. Building on Kiva’s history of providing over $35m in loans to refugees positions us for successful expansion, enabled by Kiva’s unique, risk-tolerant capital. To support this effort, Kiva will diversify the types and sources of philanthropic capital deployed via its crowdfunding platform. Enhanced philanthropic funding will not only support expanded lending but will also enable capacity strengthening for Kiva lending partners to ensure they are supporting refugee populations effectively. This will include adapting existing products and services to reach refugees (Kiva’s experience suggests this is superior to entirely new offerings) , e.g. modifying identification requirements, hiring staff from within refugee communities, or adjusting loan sizes and eligibility criteria.
Leveraging and sharing best practices to drive replication and investment at scale:
Kiva will use the Kiva Refugee Investment Fund (KRIF) , launched by Kiva Capital in 2021, as proof of concept to unlock new investments from return-seeking investors. Innovative vehicles, like KRIF’s blended finance approach, will demonstrate the investability of refugees and model approaches to serving them, potentially through a successor fund. With CGI’s support, Kiva will share these best practices enabling partners to replicate and expand Kiva’s global reach. Kiva’s work with new partners and markets will elevate the voices of refugees, building evidence-based models that truly reflect their needs. Compiling best practices for impact and overcoming barriers to refugee lending will inform Kiva’s approach and provide a model for others to scale financial inclusion for refugees.
Action Plan
2024
Q1
$1m in loans facilitated to target population through FSP partners
Landscape analysis to determine geographic and partner growth opportunities
Provide capital and support to existing FSP partners to launch and/or scale lending to refugees (ongoing) Begin raising philanthropic capital for impact measurement, lending growth, etc. (ongoing) Form strategy to engage new lenders (retail and corporate) on Kiva.org (ongoing) Initiate longitudinal outcomes study to assess impacts of financial services on refugees
Q2
$2m ($3m cumulative) in loans facilitated
Conduct needs assessment for new FSPs to determine support needed
Develop target list of potential investors and investment partners
Q3
$3m ($6m cumulative) in loans facilitated
Implement capacity-building support for new FSPs lending to refugees
Develop go-to-market plan and potential structures for investment capital
Q4
$4m ($10m cumulative) in loans facilitated
Begin investment fundraising
Begin impact measurement and evidence-gathering
2025
Q1
$4m ($14m cumulative) in loans facilitated
Ongoing fundraising for investment capital
Identify cohort of FSP partners for expansion
Provide additional loan capital to partner FSPs and increase credit lines for high-performing FSPs
Q2
$5m ($19m cumulative) in loans facilitated
Secure first investment commitments
Q3
$5m ($24m cumulative) in loans facilitated
Evaluate results of impact measurement work and create dissemination plan
Q4
$5m ($29m cumulative) in loans facilitated
First close for new investment vehicle(s) Convening to disseminate learnings from impact measurement work
2026
1Q
$7m ($36m cumulative) in loans facilitated
Begin deploying investment capital
2Q
$8m ($44m cumulative) in loans facilitated
Begin follow-on investment fundraising (fund scale-up, replication by partners) 3Q
$8m ($52m cumulative) in loans facilitated
4Q
$8m ($60m cumulative) in loans facilitated
Complete deployment of investment funds raised at first close
Kiva will adapt this draft approach as partners come on board and meet changing global dynamics.
Background
UNHCR estimates that global forced displacement, including refugees and IDPs, reached 108 million at the end of 2022— a 21% increase over 2021 and over one percent of the global population. This number is forecast to increase, with IEP predicting over 1 billion people could be displaced by 2050 due to conflict, civil unrest, and climate change.
While not a homogenous group, refugees face distinct needs and challenges. Although humanitarian support is essential, most refugee crises are protracted, meaning refugees also require longer-term, sustainable funding. Economic independence is a critical step in rebuilding lives, but capital is often lacking to support refugee entrepreneurs, who may not be eligible for formal employment.
Migration also impacts host populations and requires financial services to ensure access to opportunities and mitigate conflict with refugee populations. Additionally, providing support for communities at risk of forced migration – helping them remain safely and sustainably in their homes – is an increasingly important mitigant for the global forced migration crisis.
Despite their need and, in most cases, eligibility for financial services, financial service providers (FSPs) have largely overlooked refugees as a viable market. They are considered too risky to serve, lacking documentation and strong local ties, and may even be viewed as flight risks. Reputational concerns, legal barriers, misinformation, a lack of organizational capacity among FSPs, and a dearth of proven models for serving refugees have further excluded this population from access to finance. Lack of economic opportunity for forcibly displaced populations ultimately has knock-on effects, including host community conflict, further migration flows, and untapped economic growth potential, impacting hundreds of millions of additional families.
Note: Throughout this document, “refugees” is shorthand for Kiva’s broader target population, including refugees, IDPs, impacted host communities, and those at risk of forced migration.
Progress Update
Partnership Opportunities
Funding and implementation support: Grants, donations, and other philanthropic commitments to support Kiva’s lending goals, strengthen evidence and help fund program expansion. This could also include the in-kind provision of TA or other services (legal, fundraising) , expressions of interest from asset owners and managers interested in investing in refugee financial inclusion.
Thought leadership partners: Collaboration with other organizations with deep experience in refugee support to partner on and publicize thought leadership work around refugee financial inclusion, livelihoods, and economic opportunity, and forced migration prevention.
Voices with lived experience: Deep engagement with organizations led by and serving populations impacted by forced displacement to ensure maximum integration of their opinions and self-identified needs into Kiva’s approach.
Specialized expertise: Kiva also welcomes support from those with expertise in media/PR, tech-related product development, employee engagement/CSR, and other fields that are essential to the successful implementation of this commitment
Financing for and access to lender network: Kiva’s lending partners, which span the countries most affected by forced migration, will receive financing, capacity building, and support accessing additional investments.
Knowledge and best practices: The TA provided to lender partners will also support Kiva’s development of evidence-based lending models replicable by others.
Underwriting and investment structuring: Kiva supports investors and asset managers in developing vehicles for investing in refugee financial inclusion, as well as advising on portfolio construction, due diligence, and risk management.
Media and storytelling: Kiva has a combined social media following of over 425,000 across Instagram, LinkedIn, Facebook, and TikTok. Kiva engages stakeholders through the Kiva.org blog and using borrower interviews and videos. Kiva’s Press page highlights media engagement through press releases, impact-driven pitches, and integrated campaigns.