This post was originally produced for Forbes.
John Kluge, 35, founder and managing director for the Refugee Investment Network or the RIN, created this matchmaking service between impact investors and impact actors in the refugee space with a key group of people in mind: the 70 million refugees and internally displaced people in the world.
With refugees spending an average of 26 years in camps, he says, this is a global crisis that is growing. Millions of refugees were born in camps and have never lived anywhere else. Without a change in current trends, the number of refugees globally could approach the current population of the United States by 2030.
“If you’re displaced for decades and you are not allowed to work and not allowed to move freely (as is the case for millions of refugees and displaced people around the world), you are not living. You are surviving,” Kluge says, noting that he sees this as a social justice issue.
Refugees are usually prevented by their status from enjoying the rights and privileges of citizens. They lack permission to work and sometimes even to start a business.
Hoping to help advance a shift at scale, “The RIN works to bridge the gap between an increasing number of investors interested in refugee investments and the growing ecosystem of refugee entrepreneurs and ventures,” Kluge says.
Launched in 2018, the RIN, a 501(c)(3) nonprofit, operates on a combination of grants and fee-for-service revenue associated with its matchmaking services. The organization is not a registered broker-dealer and does not direct investments for investors; instead, it’s working to help investors find projects and opportunities that are a good fit for their impact goals and investment strategies.
“I think that there are specific funds and partners in financial services or large multilateral institutions, development finance institutions in particular, who are looking for more hands-on support in structuring new products or new funds that would support forcibly displaced people,” Kluge says. “That’s a service that we can provide for a fee.”
The investments being made in refugees have a measurable impact but also have demonstrated attractive financial returns, he says.
For example, he says two Liberian refugees in New York in the 90s started a soap business just to earn a living. Their business was built around shea butter imported from Liberia and ultimately built a large workforce there. When Unilever acquired the business called Sundial Brands in 2017, it had revenue of approximately $240 million.
The RIN has a partnership with Kiva I highlighted in an article last year. Data from Kiva suggest that refugees are just as likely to repay their loans as other Kiva customers, if not slightly more likely.
Refugees tend to be more entrepreneurial than others. Kluge notes that in the US alone, more than 180,000 businesses are run, founded or operated by forcibly displaced people.
Natasha Freidus, CEO and co-founder of NeedsList, a startup focused on refugees that receives help and advice from the RIN, focuses on this entrepreneurial spirit of refugees.
“Access to capital is a major challenge for refugees who often have trouble even getting a bank account set up in host countries.,” she says. “The Refugee Investment Network is not only highlighting this problem, they are bringing investment solutions that recognize the inherently entrepreneurial spirit of refugees, moving away from traditional models of aid, a long overdue move.”
Investing in opportunity for refugees domestically and around the world represents an opportunity for impact as well as for financial returns. Kluge is excited to match more money to projects to drive both.
Ruma Rose, the founder of Humanitarian Ventures, is a member of the RIN and serves on its steering committee. She says addressing the refugee crisis will require new tools and business models. “That doesn’t just manifest out of thin air.” She points to the RIN as the answer.
We need someone to help connect refugee entrepreneurs, and entrepreneurs supporting refugees, to investors, mentors, and technical assistance. We need refugee and migration specific tools, frameworks, and metrics and we need these open-sourced for the impact investing community. We need market leaders like the Calvert Impact Fund or Bain Double Impact to enter the market, but they’re not experts on refugees or migration and need a partner they can trust to advise them on impact. Even governments like Mexico need help developing a strategy for inclusive investment. This is a lot of work. It’s hard, it’s important, and it’s almost always undervalued. But someone has to do it; thankfully, that’s exactly what the RIN is doing.
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