Kiva Refugee Investment Fund
Investment: Kiva Refugee Investment Fund
Type: Microfinance fund
Refugee investment category: R3
SDGs addressed: 8, 10
Headquarters regions: San Francisco, CA, USA
Summary: At SOCAP 2018, Kiva announced the launch of the Refugee Investment Fund, a $50 million fund with an expected IRR of 1% to 5% and loan terms ranging from three to ten years. Having built the evidence base for refugee-focused microfinance, Kiva is hoping to scale lending solutions to refugees and host communities with their first returns-seeking product of any kind available to accredited investors. To date, Kiva has provided financing to over 11,000 refugee entrepreneurs with a refugee repayment rate of 96.6% (compared to 96.8% for all non-refugee loans). Following the success of their initial World Refugee Fund, the number of Kiva microfinance field partners has increased from 3 in 2016 to 11 in 2018, laying the foundation for Kiva's current Refugee Investment Fund.
Potential refugee impact: When the Kiva's previous World Refugee Fund launched, it raised $500,000 for over 500 refugee entrepreneurs in just 24 hours, oversubscribing all refugee loans listed on their platform and proving that there was considerable demand from Kiva’s lenders. As the fund continued to grow, the data it collected helped partner MFIs become more comfortable lending to a new customer group, which then helped grow the pipeline of refugee entrepreneurs. The Refugee Investment Fund will serve to further scale these efforts, providing institutional investors with a positive IRR fund to add to their portfolios.
Investment thesis: Refugees have been traditionally underserved by banks and other financial institutions. Kiva, through their Refugee Fund is working to improve the financial inclusions of refugees and other forcibly displaced persons. In Kiva's latest impact report, refugees were revealed to have approximately the same repayment rates than traditional loan recipients. With support from corporate partners, the World Refugee Fund matches 1:1 each $25 lent on Kiva.org to displaced populations, while funds last. Read their 2018 impact report here.
Structure: The Refugee Investment Fund is a $50 million fund with expected IRR of 1% to 5% with loan terms ranging from 3-10 years.