Nearly 80 million people are displaced from their homes worldwide today, with this number expected to reach 300 million by 2030. Immediate humanitarian aid is critical for refugee communities, but economic opportunity is needed for longer-term stability. While access to financial services is critical, most refugees are financially excluded.
Despite the critical need, most financial institutions do not lend to refugees due to perceived risk. Kiva.org’s impact-first funding is uniquely risk tolerant, which enables our global lending partners to pilot refugee lending. With $18 million lent to more than 17,000 displaced borrowers, we are demonstrating with our partners that refugees do repay their loans and at similar rates to non-refugees. As financial institutions see that refugee lending is not only possible, but viable, they grow their refugee client base.
As our local partners see the potential in lending to refugees, they need additional capital to scale this work. Kiva’s strong track record of pioneering lending to refugees is driving interest and support from institutional impact investors, which led to the launch of Kiva Capital and one of the first fund strategies targeting financial inclusion for refugees in 2019. Mobilizing institutional capital will allow us to accelerate and scale our refugee lending while targeting impact-first returns for investors
The ability to prove identity and build a credit history is essential in accessing financial services. However, many refugees lack formal identification, and past credit history is typically lost when refugees settle in a host country. Kiva has developed Kiva Protocol, a digital identity and credit history platform. We plan to pilot Kiva Protocol as the next step to accelerating refugee access to financial services and economic opportunity.