Rebuilding lives: Kiva’s commitment to provide financial access to 450,000 refugees

What you’ll learn in this article:

• How Kiva started lending to refugees
• Four populations impacted by displacement that Kiva works with?
• How financial inclusion leads to positive outcomes for refugees
• What Kiva is doing to scale and meet our goal
• How you can change the life of a refugee

At the end of last year, Kiva announced ambitious goals to scale our reach across four key population groups:

• Underbanked women
• Refugees and communities impacted by displacement
• Climate-vulnerable communities?
• Systemically marginalized communities in the U.S.

Today, I want to share with you more details about our impact strategy for working with refugees and displaced communities.

How Kiva's work with refugees started

Kiva's work with refugees began in 2016 after recognizing the unique financial challenges faced by refugees and displaced individuals. Refugees are often denied the financial access that they need because of barriers unique to their situation, which range from a lack of access to identification or collateral, to misconceptions assuming that refugees are a more risky client to serve.

Kiva.org’s crowdfunded lending model has a high risk tolerance, uniquely allowing us to experiment with populations that traditional financial service providers are not able to, including refugees. Not long after we started lending to this population, Kiva was quickly able to show that over 96% of refugees repay their loans — which is the exact same rate as we see from other, non-refugee borrowers.?

Listen to Kiva expert, Lev Plaves, speak about refugee lending on the How to Lend Money to Strangers podcast

With this proof behind us, Kiva has not only grown our own focus on lending to refugees, but we have shown financial service providers that refugees are creditworthy, helping them take the leap to start funding this underserved population.?

“The financing from Kiva gave us the initial push to take the risk and start lending to refugees. We wouldn’t have seen this expansion without Kiva.” - Kiva Lending Partner

Having demonstrated the viability of lending to refugees, we then looked to move beyond the crowdfunding platform to expand this work through Kiva Capital, which sources and applies larger investments and institutional capital to expand refugee lending. In 2021, Kiva Capital launched the Kiva Refugee Investment Fund (KRIF), a 5-year fund which has since deployed $40.7M towards financial access for displaced communities, reaching over 50,000 borrowers.?

Understanding the different populations within the refugee community

There are over 110 million people currently displaced due to violence, climate crises, and human rights violations, and that number is expected to rise to 300 million by 2030.?

Kiva focuses on expanding financial access to improve the lives of refugees across four different populations affected by forced displacement:?

Refugees

Refugees are people who have been forced to flee their home and country in order to escape violence, persecution, or natural disasters. Most refugees are not able to return home and must seek safety and resettle in a new country – oftentimes with little or no resources.

Internally displaced people (IDPs)

Similar to refugee populations, IDPs have had to flee to new communities, but they remain within their home country. After leaving their financial security behind, they face economic challenges that negatively impact their health, housing, and livelihoods.?

People at risk of forced migration?

With unprecedented numbers of displaced people worldwide and growing pressures that force people to migrate, including climate change and economic hardship, people at risk of forced migration need support to sustainably remain in their homes.?

Host communities

Most refugees are hosted in low- and middle-income countries where resources are already limited. As more people settle in new areas, impacted host communities are likely to experience economic and infrastructure strains, food insecurity, and more.

How microloans transform the lives of displaced people

According to an independent survey by social impact researcher 60 Decibels, refugees working with Kiva Lending Partners saw significant improvements after receiving their loans.?

• 91% said their quality of life improved
• 80% said their ability to fund an emergency expense increased
• 68% said they increased spending on their children’s education

Behind these numbers are thousands of individuals and their stories of how loans have impacted their lives.?

One compelling story comes from Mbazimutima and Beata, a husband and wife who fled from violence in the Congo to Uganda to start a new life. While they had a business and a life in the Congo, in Uganda they had to start again, and Mbazimutima recalls how he ‘hustled’ to start a business and rebuild their livelihood. They’ve now had four loans funded by and repaid to Kiva lenders, which have helped them grow a store that serves the needs of people in the Nakivale refugee settlement where they live.?

“The money we were given helped a lot. Now I’m able to bring water to the people in my community. I witnessed my children’s lives change.” - Mbazimutima, Kiva borrower, refugee and store owner?

How we’ll reach our goals?

We believe it's our moral imperative to grow our impact, which is why we’ve set the ambitious goal of supporting 450,000 displaced people by 2028. This is a big leap from where we are today — having supported 110,000 people in the past eight years, we plan to reach four times as many people in half that time.

There are three main investments we are pursuing to reach our goal:

Crowdfunding expansion?

Behind each Kiva borrower success story are thousands of individual lenders who contribute to crowdfunded loans. Kiva recognizes the power of our community’s collective action and in order to reach more refugees, we’ll need to increase this lender base. We’re developing new product experiences that harness the passion of individual lenders, as well as communities of lending teams.

In addition to reaching new individual lenders, we’re developing tools for our corporate and organizational partners, who contribute to our impact through their corporate social responsibility efforts. Value-aligned partners directly contribute to our ability to reach more refugees, such as TripAdvisor. A Kiva partner since 2021, TripAdvisor answered Kiva’s call to support refugee communities and has been matching loans to refugees through a $150,000 catalytic grant, doubling the impact of loans made by their traveler community.?

You can lend to a refugee or internally displaced person here.?

Capacity building

To complement the loans we finance, we’re providing business support and consultancy services for partner institutions launching or growing their refugee lending, such as product development, staff training, and more. This will help these institutions reach more displaced communities, in a more impactful and tailored way.?

One such project is currently underway with Kiva Lending Partner UGAFODE. One of the challenges UGAFODE has been facing is that it was not easy for them to physically reach refugee clients to provide them with the financial access they need. We helped them source and fund an office structure within a refugee settlement in Uganda, so that they can increase their impact. We’re also funding training of UGAFODE staff on how to tailor their services for refugees. As part of this program, they will train refugees themselves to go out into their community, mobilize other displaced people into groups, and share knowledge on financial management and the financial services they can utilize from UGAFODE. This will help UGAFODE reach many more clients, greatly enhancing their ability to make a positive impact on the livelihoods of refugees.?

Evidence building & outcome data?

Kiva is committed to deepening our understanding of the specific needs of refugees and the barriers they face when accessing finance. We not only use these learnings to enhance Kiva’s approach to serving this population, but we share this information across the social impact and financial service provider sectors to move the entire industry forward.

With the support of our partners, we’re currently conducting a refugee needs-assessment in Latin America, which will help us learn more about how to tailor products for this population. We’re also working to conduct a longitudinal study that will track the outcomes of refugees who receive loans, so that we can improve our understanding of how to have an even greater impact.

Together, we can reach more communities impacted by displacement

I invite you to join Kiva by partnering with us, lending, or sharing our stories. Together, we can create a world where everyone, no matter their background or circumstances, has the opportunity to achieve their dreams and live with dignity.

With gratitude,

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-Vishal