Impact investing, otherwise known as socially responsible investing, refers to investment aiming to create a positive social or environmental impact while also generating a financial return. Some subsets of impact investing intend to control the power of private investments. Here, these investors are only addressing the concerns of particular groups.
For example, “gender lens investing” encourages investment in companies that are led by women. Additionally, it promotes investment in companies that create products or services seeking to improve women’s’ lives and wellbeing.
However, an unprecedented rise in the number of refugees and displaced people globally is creating the need for a new type of impact investment, specifically addressing their needs. According to the United Nations Refugee Agency, a record 70.8 million people around the world are either internally displaced, have become refugees, or are seeking asylum due to natural disasters or violent civil conflicts. Here are 3 organizations that are leading the charge in the new field of impact investing in refugees.
3 Leading Organizations Focused on Impact Investing in Refugees
- Refugee Investment Network
The Refugee Investment Network (RIN) is one of the leading organizations in the emerging field of impact investing in refugees. At the Social Capital Markets (SOCAP) conference in San Diego in October of 2018, RIN was launched. RIN serves as an information hub connecting investors to projects that benefit refugees. To help investors address this group of individuals, RIN has created the Refugee Lens, which guides investors on how to most effectively seek out and invest in organizations benefitting refugees. One of RIN’s goals is to challenge the misconception that refugees are an economic burden. Instead, RIN promotes the idea that impact investing in refugees can stimulate economic growth, and presents evidence of this in a report, titled “Paradigm Shift.” The report points out that entrepreneurs comprise 13 percent of the refugee population in the U.S. This means that refugees have a higher percentage of entrepreneurs than both the non-immigrant refugee population and the native-born population in the U.S.
Epimonia is a fashion company that promotes awareness of refugee issues in the U.S. The company was founded by Mohamed Malim, a Somali-American entrepreneur and former refugee who fled Somalia’s civil war. Initially, he had relocated to Kenya, but then again to the U.S. Among other products, Epimonia sells bracelets made from life vests that were once worn by refugees, known as “embracelets.” The Greek island of Lesbos provides these life vests since they have a high population of refugees. Additionally, Epimonia works with the nonprofit organization Refugees4Refugees to acquire these life vests, which then become embracelets. Refugee workers in the Netherlands make the bracelets, which then sell throughout the U.S. Malim has sold almost 1,500 embraclets, and has visited 20 college campuses to spread awareness of refugee issues. Epimonia invests 50 percent of its profits into initiatives that benefit refugee communities in the U.S. The organization has given $1,500 to the Dream Refugee Mentorship Program. They provide current and former refugees with professional mentorship and scholarship aid. Additionally, it provides them with a network of connections to help them succeed in the workforce after college.
- Kiva Refugee Investment Fund
In 2017, the microfinance company Kiva launched the Kiva Refugee Investment Fund (KRIF) to help extend financial services to refugees and provide loans to those looking to start businesses. Unlike other nonprofits that operate on the basis of donations, KRIF utilizes crowdfunding to channel money into loans. These are then given to refugees, which are later paid back. This means that individuals who contribute to loans not only get to aid in refugee entrepreneurs launching their businesses but also get to share in the successes that those businesses create. KRIF challenges the idea that refugees are too risky to invest in, and has supporting data. According to its website, KRIF currently has a rate of repayment on its loans of 95.5, percent. Additionally, they have effectively crowdfunded $12.5 million in loans to 15,873 refugee borrowers. In total, KRIF aims to reach 200,000 borrowers.
Multiple organizations are beginning the way for investment in refugees. Impact investing in refugees has proven to be far less risky than naysayers have claimed. In fact, it is incredibly effective at both generating a financial return to investors and uplifting refugee communities around the world.
– Andrew Bryant