Refugees Repay Loans at Same Rate as Non-Refugees, Study Finds

Refugees Repay Loans at Same Rate as Non-Refugees, Study Finds

Refugees and internally displaced persons (IDPs) who receive financial assistance repay their loans as quickly and as completely as the average borrower, a report from online lending platform Kiva finds. 

The report, World Refugee Fund Impact Report (13 pages, PDF), found that loans made through Kiva's World Refugee Fund — microloans totaling $6.6 million to 7,800 refugees and IDPs in six countries — had a repayment rate of 96.6 percent, similar to the 96.8 percent rate for non-refugee loans made during the same period. The finding refutes the misperception that refugees and IDPs are a too-risky lending proposition and bolsters the case for financial institutions to step up their efforts to serve displaced persons, many of whom need loans to start a business, pay for medical treatment, or continue their education.

According to the report, nearly half of Kiva's loan portfolio for refugees and IDPs was in Lebanon (44.7 percent), followed by Colombia (33.2 percent), Palestine (20.2 percent), Jordan (1.1 percent), and Rwanda (0.8 percent). In addition, more than half (55 percent) of refugee and IDP borrowers are women, as are nearly two-thirds (64 percent) of Kiva lenders. The report also shares lessons learned by Kiva and the local financial institutions with which it partners, including the need to tailor loans for the needs of refugees and IDPs by accepting different types of identification; partnering with organizations providing livelihood services to refugees; and addressing the needs of host communities.

Kiva plans to distribute more than $6 million in loans to refugees this year and, with support from the World Refugee Fund's founding partners the Tent Partnership for Refugees, the Alight Fund, and USA for UNHCR, hopes to provide $26 million in loan capital to more than 28,000 refugees and IDPs by the end of 2020, while lending another $28 million in support of host communities in Lebanon, Jordan, and Turkey.

"Millions of refugees and displaced global citizens face extreme and debilitating poverty every day," said Kiva co-founder and president Premal Shah. "What makes these findings from our World Refugee Fund Impact Report so significant and exciting is that we're seeing — in such a short time — truly viable growth, scale, and repayment across multiple countries and field partners....Another meaningful insight from the 2018 report is the reciprocal trust that we see growing between refugees and members of their host communities. Despite initial fear and resentment, these disenfranchised unlikely neighbors are connecting in remarkable and very sustainable ways."

"Kiva Releases Its First World Refugee Fund Impact Report." Kiva Press Release 06/20/2018. "World Refugee Fund Impact Report." Kiva Report 06/20/2018.