In the past two to three years, more initiatives have emerged to connect finance with refugees.

“The humanitarian response system is important work for providing basic necessities for survival, but everyone engaged recognizes it is not sustainable,” says founder of the Refugee Investment Network (RIN) John Kluge.

There are more than 70 million people worldwide who have been forcibly displaced, and climate change is expected to lead to another 300 million in the next decade. Displacement length has increased: many individuals and families spend 17 to 26 years away from their homes. There is, therefore, a need to rethink how to support integration in a formal economy.

“Right now, displaced people are often not allowed to participate and so don’t – they have to rely on aid. Or they are participating in grey or black markets which are insecure and dangerous,” says Kluge.

He adds that there is now enough supply and demand interest to create momentum around refugee and migration investing. Indeed, there are several projects under way or planned. Kiva, the world’s largest crowdfunded micro-lending platform is looking to close their Kiva Refugee Investment Fund later this year.

The fund will finance micro-finance institutions (MFIs) to make loans to refugees and in refugee communities.

Lev Plaves, Kiva

Lev Plaves, senior investment manager for refugees and displaced populations at Kiva, says: “We were already lending to refugees through partners on our crowdfunding platform and looked into repayment data for those customers. It has been over 95% on average since we began this lending.

“Our experience led us to question a common assumption, that refugees are too risky, which we have found to be a common reason why MFIs are reluctant to make loans to refugees or end investors have not generally thought of lending to refugees as a viable impact investment. We now believe there is data that can help change the traditional narrative around refugees and supports the creation of a dedicated fund.”

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Systemic barriers

The fund will work initially with MFIs in the Middle East, South America and Central America and expand to Africa. Investors in the fund so far are from foundations and faith-based organizations. Plaves says that the fund has impact- reporting methodologies that will allow for data collection that will hopefully attract more institutional money.

The International Rescue Committee’s (IRC) Centre for Economic Opportunity is also looking for partners for consumer finance for refugees in the US.

“In the US as in other developed countries, resettlement is often deemed as successful when the client gets their first job or has an income that can cover basic expenses,” says Kasra Movahedi, director of the centre. But there are systemic barriers that serve to limit upward mobility, the impacts of which are often more sharply felt by refugees.”

The centre currently offers refugees loans to help build credit, buy cars, pay for training or start businesses in 10 regions of the US. These loans, averaging $2,000, help newcomers meet critical financial needs while costing only a fraction of what would normally be available to credit-thin borrowers like refugees.

The benefits of investing with refugee entrepreneurs and entrepreneurs supporting refugees are very real, and the costs of not doing so are simply too great

– John Kluge, Refugee Investment Network

The organization has helped to refinance loans with interest rates as high as 180% down to 9%. To complement the loans, the IRC offers financial education.

“It’s an invaluable service because consumer financing options in the US are very limited,” says Movahedi. “We also anticipate income volatility for newly arrived families who may be doing shift or hourly work, so we can help smooth those out and be a safe alternative to predatory lenders. Nothing can make it easy to get ahead in America, but we hope to make it at least a little bit easier.”

Again, repayment rates are high – between 94% and 98%. The IRC has made about $2.1 million in loans so far, and is now looking for partners who may be able to invest in a loan fund targeting between zero and 2%.


For impact investors, RIN’s Kluge says refugee lens impact funds make sense.

“More than half of refugees are women, and more than half of refugees are people of colour, so refugee investments could be part of gender lens portfolios for example or portfolios focused on opportunities for minorities,” he adds.

John Kluge, RIN

“It’s not different really to many of the funds already in existence, but the story has often been misunderstood. We’re hoping to change that through bringing the private and public sector together to share the story, and to match investment opportunities with investors.”

The RIN has developed a refugee lens framework to help increase investment to refugee-hosting countries.

Another fund within the network is being developed by 17 Asset Management (named after SGD17 – partnerships) to advance development in southern Mexico, which is part of the Initiative for Inclusive Investment in Mexico, a cross-sector, cross-border partnership which the RIN developed as a model for how countries can proactively address large-scale forced migration.

There are so many opportunities for investment within a larger refugee lens, says Kluge, pointing to income-sharing programmes and work around accelerators and refugee start-up networks such as that being done by the Miller Centre for Social Entrepreneurship in Santa Clara, and TERN (The Entrepreneurial Refugee Network) in London.

“These are in addition to the three or four micro-finance funds in various stages of development,” says Kluge. “It is no longer valid for banks and investors to say there is no pipeline potential. It’s just a new field so needs some elbow grease, structuring support, and intentionality.

“The benefits of investing with refugee entrepreneurs and entrepreneurs supporting refugees are very real, and the costs of not doing so are simply too great.”

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