Pledge fulfilled: USD32.5 million raised to lend to refugees and their host communities
In 2005, Kiva was founded in San Francisco with a mission: to expand financial access through crowdfunding loans to help underserved communities thrive.
For people forced to flee, being financially stable throughout their journey can be extremely difficult, and they may struggle to have access to finance even once settled in their host communities. Financial inclusion means having access to formal financial services, such as banks, savings, loans, and insurance companies, amongst others. This can facilitate further self-reliance, develop livelihood opportunities, and improve resilience of the community.
Despite this need, most refugees are financially excluded, as banks are usually unwilling to serve them due to perceptions that this population is too risky, and concerns that they will not repay their loans. Since 2016, Kiva has been working to catalyze lending to refugees through the Kiva.org crowdfunding platform, both to provide much-needed loans to refugee communities and to prove that refugees are, in fact, creditworthy. With over USD 20 million lent to displaced borrowers, Kiva has observed that refugees repay their loans at rates similar to, or higher than, people who are not refugees.
Having demonstrated the viability of lending to refugees and wanting to expand its reach, Kiva launched the Kiva Refugee Investment Fund (KRIF) and in 2019, pledged at the Global Refugee Forum (GRF) to raise USD 30 million to reach borrowers in fragile communities. The KRIF aims to bring critical institutional impact capital to refugee financial inclusion. Part of Kiva Capital Management, the impact-first fund management subsidiary of non-profit Kiva.org, KRIF brought together leading global impact investors, offering them the opportunity to provide larger sums of capital to be lent to refugees, internally displaced persons, and affected communities.
"DFC is proud to support the Kiva Refugee Investment Fund, which will expand access to critical financing and training related to financial literacy and business development to refugees and internally displaced persons across 13 countries worldwide" - Algene Sajery, Vice-President of the US Development Finance Corporation’s Office of External Affairs and Head of Global Gender Equity Initiatives.
The final close of the fund was announced in April 2021, exceeding its goal by raising USD 32.5 million, which will be lent to thousands of people, enabling them to establish businesses and to become more self-reliant. Capital from the fund will be invested over the next five years in partnership with microfinance partners across the Middle East, Africa, and Latin America. Less than two years after the GRF, Kiva delivered on its pledge, and is hoping that this success will encourage other investors to scale up similar projects and follow up with more funding.
To find out more, visit kiva.org.