Refugee Investment Network

Today, more than 70 million people are forcibly displaced worldwide, representing the defining social crisis of our time. Refugees face serious challenges, often stemming from underinvestment, restrictive labor laws, and economic exclusion. Yet the data show that refugees are resilient, entrepreneurial, and investable. As the magnitude of displacement grows, investors are looking for a way to invest in refugees. The RIN bridges the gap between refugee investments and the breadth of interest capital by connecting refugee enterprises with investors. At the global scale, the RIN aims to (i) Create at least 1 million new jobs and livelihood opportunities for refugees and host communities; (ii) Unlock $2 billion in new refugee-focused investments; (iii) Reshape national policies to be more supportive to investment and economic opportunities for refugees; and, (iv) Build a new, vibrant investment thematic: “refugee investing.”

With more than 70 million people forcibly displaced, forced migration is a massive problem that intersects with almost every major development goal, limiting human progress in health, gender equality, poverty reduction, global security and stability. After conducting interviews with over 200 investors, humanitarians, development finance professionals, entrepreneurs, and displaced people, we found that there has been limited focus on bringing investment and self-reliance to refugee populations at home and abroad. 

Indeed, although refugees are proven to be employable, investable, and credit worthy, refugees remain at a disadvantage because they have limited access to capital. Refugees are often denied the right to work, start a business, own property, access banking or credit facilities, and travel freely. The vast majority of large scale, refugee-hosting countries prohibit or severely limit the formal participation of refugees in their economies. Unable to tap into major investment networks, refugee businesses struggle to grow and thrive, and the entrepreneurs are left on the margins of society.

Investments in refugee ventures are also limited by a lack of precedence as well as investors’ ignorance of opportunities, and biases against displaced people. Inaccurate perceptions that refugee entrepreneurs are risky and univestable remain commonplace. 

The RIN seeks to improve the lives of refugee entrepreneurs and spur economic development in their host communities. Our organizational objective, research, products and services are informed by direct input from displaced people from concept to implementation. To design the RIN, we worked in consultation with investors and displaced people to test our ideas and receive their feedback. Over one-third of our Steering Committee and team are refugees, or children/grandchildren of a refugee. 

The RIN intentionally seeks to forge partnerships with organizations that support refugee entrepreneurs, such as the Miller Center for Social Entrepreneurship in Santa Clara, California, or Five One Labs in Kurdistan Region of Iraq. Where and when possible, we also hire refugees to build, develop, or inform our own products and services, such as RBK.org, Syrian refugee coders who we contracted to help develop our first website. 

By 2030, the RIN will unlock $2 billion in investments and create 1 million jobs to provide pathways for the long-term economic integration of forcibly displaced people. The RIN will mobilize the success of these investments to incentivize progressive policy reforms and unlock markets so private capital and refugees are able to engage in robust economic activity. 

The RIN is the first impact investing and blended finance collaborative dedicated to connecting investors, refugee entrepreneurs, and refugee supporting businesses to capital that creates durable solutions to global forced migration crises. The RIN connects refugee enterprises with the capital and support they need to thrive and serve the needs of their communities. 

Utilizing the RIN’s Refugee Lens, we have built an integrated investment platform to host a geographically diversified portfolio of high-quality refugee investment opportunities that help to create maximum exposure and impact in both the capital markets and the international development community. The Refugee Lens categorizes such investments into 6 categories including: (a) ventures owned or led by refugees (b) businesses that hire and source from refugees and forced migrants; (c) enterprises that provide goods and services to such groups; (d) business which source product or employ refugees to the benefit of host communities (e) lending facilities that support refugee-owned and supporting enterprises; or (f) investment funds where refugee owned and supporting enterprises make up a significant percentage of their portfolio.

After identification of refugee entrepreneurs and refugee-supporting ventures, the RIN provides them with tailored growth and development tools. In partnership with the RIN, Village Capital is deploying Abaca, a software platform integrated on the RIN’s website that teaches refugee entrepreneurs how to think like an investor, evaluate their own companies, and assess their relative strengths and weaknesses. They are then provided resources to strengthen their business models and governance structures and provided access to Abaca’s investor network. The RIN’s integrated platform will also be home to the Refugee Opportunity Index, (ROI) developed in collaboration with the Economist Intelligence Unit, to measure and rank the policy environments of refugee hosting countries and ultimately incentivize governments to make pro-refugee policy reforms.

Through its work, the RIN helps to nuance and enrich the response to refugees from one focused narrowly on humanitarian assistance, to one that also promotes sustainable change and self-reliance for both refugees and their host communities. Indeed, the mobilization of capital and accrual of refugee investments will not only help develop refugee enterprises and improve livelihoods, new business growth also will contribute economically to their host communities. In short, RIN has enormous potential to elevate the socio-economic standing and contribute to the social inclusion of forcibly-displaced people as well as their hosts by unlocking innovation, entrepreneurialism and growth through investment.

The RIN is the first impact investing and blended finance collaborative dedicated to creating durable solutions to global forced migration. By pursuing an integrated strategy which targets various stakeholders including refugee ventures, impact investors, and development finance institutions, the RIN has been able to define and promote a new investment thematic: refugee investing.  

RIN does this in four distinct ways: 

(i) Mobilizing Investment Capital: RIN helps investors to put their capital to work supporting forcibly displaced people and the communities hosting them, including: sourcing refugee investment deals; matchmaking with co-investors; and educating investors and funders in refugee investing; 

(ii) Building the Field of Refugee Investment: RIN is building the foundation for a vibrant refugee investment market, including: defining standards and impact measurement metrics; experimenting with early stage pipeline development and repeatable deal models; and hosting refugee investment convenings; 

(iii) Advocating for Policy Change: RIN advocates for policy changes that allow refugees to become valuable contributors to the local economy, including: creating, in partnership with the Economist Intelligence Unit the Refugee Opportunity Index (ROI) and platform; enabling and mobilizing IFIs in the field of refugee investments; and conducting targeted country-level advocacy, using investment to leverage policy change; 

(iv) Changing the Narrative Surrounding Refugees: RIN works with strategic partners to change the negative perception of refugees, by: building an archive and disseminating refugee investment and enterprise success stories; publishing reports and timely research; and collaborating with media and campaign partners to publish innovation and original work that shifts the characterization of refugees.

The RIN has developed and launched an integrated Investment Opportunities Platform, to serve as a meeting place for investors, ventures and other interested stakeholders. An interactive map allows users to click into refugee investment opportunities to review business summaries, investment theses, potential impact on refugees, management, as well as operating and governance structures. Users can also sort through investment opportunities on the digital map and sort by SDG, business type, Refugee Investment category (in line with the “Refugee Lens” developed by the RIN), and sector. This platform enables refugee enterprises, for the first time, to be showcased on a global scale to prospective investors.

RIN also partnered with Village Capital to create the Abaca Investment Readiness Tool for refugee enterprises, which provides increased opportunities for refugee enterprises to promote their business, match with investors, and receive tailored business guidance. RIN continues to work with Village Capital to fine tune this offering to the needs and demands of both refugee enterprises and refugee investors. 

The investment platform will also be home to the Refugee Opportunity Index, being developed in partnership with the Economist Intelligence Unit. The ROI will analyze and assign countries hosting large numbers of refugees a score based on an original and expert-informed research framework, and extensive on-the-ground research, to best understand the status of refugees in target geographies. Such information will be critical for investors, policy makers and other stakeholders as they make investment and regulatory decisions and will be used with governments to leverage pro-refugee policy reform.

The RIN’s 2018 flagship report, Paradigm Shift, found that refugees are investable, employable, and creditworthy. Evidence demonstrates that refugees have higher rates of entrepreneurship and lower workplace turnover than host-country nationals. Additionally, an IMF study found that investing one euro in refugees can yield nearly two euros in economic benefits within five years, as long as refugees are permitted to work. KIVA’s World Refugee Fund data show that the repayment rate for refugee entrepreneurs is comparable to those of host entrepreneurs.

Based on these findings, the RIN believes that if investors are educated about the economic potential of refugees and provided exemplary advisory services, investments in refugee enterprises will increase. Similarly, if refugee entrepreneurs are provided tailored support services and access to a functional investment platform, they will be able to raise the investment capital they need to succeed. Mobilizing capital to meet the needs of refugee ventures will generate increased opportunities for entrepreneurialism, employment, economic development and self-reliance for refugees and their host communities. 

The RIN’s four strategic activities are as follows: (i) Mobilize Investment Capital; (ii) Build the Field of Refugee Investment; (iii) Advocate for Policy Change; (iv) Change the Narrative Surrounding Refugees. Intended outcomes include: increasing refugee investment deals; increasing the number of quality jobs created for refugees; and changing the narrative and policies in favor of refugees. By 2030, RIN aims to mobilize $2 billion in capital to create 1 million new jobs, improving the economic livelihoods of forcibly displaced people and their hosts globally. 

The RIN works with investors and refugee ventures to build a thriving field of refugee investment. Through targeted interventions we mobilize capital and leverage the support of government actors to build durable solutions to the current crisis. 

Since its creation, the Refugee Investment Network has quickly built its investment platform and established multiple partnerships that have enabled the organization to expand its reach and impact. To date, RIN has mobilized over $200 million in refugee investments and onboarded 30 refugee ventures onto our investment platform. In June 2019, the RIN announced partnerships with 17 Asset Management, Dalberg, and the Government of Mexico to design and implement a $250 million fund: the Initiative for Inclusive Investment in Mexico (3IM). Additionally, the RIN is partnering with the International Rescue Committee’s Center for Economic Opportunity to launch a $5M Social Impact Fund to meet cross-cutting consumer and commercial needs of refugees and local communities. Both of these initiatives have the potential to improve the lives of thousands of individuals throughout North and Central America. 

Over the next year we will onboard at least 100 additional refugee ventures onto our investment platform; mobilize at least $200 million in investment using our Refugee Lens; and support the creation of 10,000 quality jobs for refugees and host communities. Within 5 years we hope to onboard 500 refugee ventures on our platform, having mobilized $1 billion in investment to support approximately 500,000 jobs.

The RIN’s operations are focused on four pillars of action: mobilizing investment, building the field of refugee investing, changing policies concerning refugees, and changing the narrative around forced displacement. Defining, promoting, and expanding a new investment thematic, “refugee investing,” is a collaborative and intersectional process that the RIN is excited and uniquely positioned to lead. We aim to create a vibrant field of investing across the capital continuum with a variety of institutional and private actors supporting refugee ventures around the world. 

More specifically, by 2020, the RIN aims to facilitate $200M in refugee investments and create or support the creation of 10,000 jobs for refugees. By 2025, the RIN aims to facilitate a total of $1B in refugee investment deals; create or support a total of 500,000 jobs for refugees; and change the narrative or policy in favor of refugees in five targeted countries. By 2030, the RIN aims to facilitate a total of $2B in refugee investment deals; create or support a total of 1 million jobs for refugees; and change the narrative or policy in favor of refugees in 10 targeted countries. 

While bold we believe these goals are achievable.  Indeed, as the field of refugee investing takes flight, we believe billions of dollars of impact capital will be directed into this new investment thematic -- the impact of which could be several orders of magnitude greater than the impact targets highlighted above.  Both scale and transformational change are at the heart of RIN’s model.

The most significant risk to the RIN is its short funding runway. Although the RIN has been well-received by current and potential funders, the timeline for securing additional funding commitments has been longer than expected. Due to these funding shortcomings, we have delayed onboarding an investment manager. Notwithstanding these issues, changes to our original plan were somewhat anticipated and thus taken in stride. We have benefited greatly from the experience and guidance of GDI that has helped RIN look around corners, prudently sequence activities and anticipate potential problems. Overall changes in our program have been relatively small and have not disrupted our growth.

From a market perspective, our analysis of the refugee investment market found four key barriers to refugee investing: (i) Lack of deal flow especially with consistent, large, investable, and scalable projects; (ii) Absence of well-aligned opportunities, patient capital, validated local and capital partners; risk to capital and reputation; and lack of precedent and repeatability; (iii) Investors’ ignorance of opportunities and lack of information surrounding partners and investees’ absence of skills, experience, and know-how. Financial institutions also maintain biases against displaced people and the entrepreneurs who provide products or services to them. (iv) Lack of rights, as refugees are often denied the right to work, start a business, own property, access banking or credit facilities, and travel freely. Further, few specialized intermediaries exist to build partnerships to attract capital and match-make.

The RIN has recently articulated a suite of advisory services designed to generate revenues through retainer agreements with funds and other investors, thus enhancing its own self-reliance.

The RIN’s four pillars described previously are designed to target each of the market barriers we’ve identified. By mobilizing investments, RIN will connect refugee enterprises with capital across the risk/return/impact spectrum. This goal requires building a geographically diversified portfolio of high-quality investment opportunities that help to create maximum exposure and impact in both the capital markets and international development community. 

To build the field, the RIN developed and supports the adoption of the “Refugee Lens” framework and criteria for sourcing and marketing refugee enterprises; defines standards and metrics for measuring refugee impact; and supports accelerators and incubators to grow the refugee investment pipeline. 

To change the narrative surrounding refugees, the RIN showcases refugee entrepreneurs, refugee investments, and contributions of refugees to their communities, with a focus on elevating refugee voices. And to advocate for policy change, the RIN uses data, evidence, and the economic leverage of our investment network to improve macro and micro policies in support of refugees, including the right to work, the right to bank, and the right to access housing.

The Global Development Incubator (GDI) designs, builds and launches new organizations and partnerships for social impact around the world. As an experienced incubator of multi-stakeholder initiatives, GDI serves as the fiscal agent to RIN and provides strategic, programmatic, organizational, communications, and F&A support to the RIN team.

The RIN has two full-time staff: John Kluge and Tim Docking, the Managing Directors of the RIN. The RIN benefits from the support of GDI staff which includes Joanne Ke Edelman (COO), Andrew Stern (Strategic Advisor), Sara Beatty (Communications Manager), Malia Bachesta Eley (Senior Communications Associate) as well as financial management support from Elizabeth VanDerWoude, GDI’s Director of Finance and Denis Slootsky, GDI’s Senior Accountant.

Kluge brings strengths as a systems entrepreneur and committed social justice activist to the RIN. He is the Co-Founder and Managing Partner of the Alight Fund, an investment and financing company for refugee and host-country entrepreneurs. He co-founded Eirene, an impact investing fund and Toilet Hackers, a social enterprise that scaled sanitation access to 2.5 billion people without a toilet. Kluge currently serves as a member of the Center for Strategic International Studies’ Taskforce on Global Forced Migration, as a Director of the Fonderie 47 Foundation, as the Co-Chair of the Virginia Policy Entrepreneurship Lab, and as a member of the Human Rights Commission of Charlottesville. 

Docking brings twenty years of business executive, emerging market, and public sector experience to RIN. As an intrapreneur, he built a new $100M revenue stream at IBM; as a public sector executive and manager, he helped start up the MCC (U.S. government agency); and as a scholar, he directed Africa research at a D.C. think tank. Docking has testified before Congress, published and commented widely in the media, is a member of multiple national and international boards including the Private Sector Advisory Council at the Millennium Challenge Corporation, and has helped form and implement policy at the highest levels of government while a White House Fellow. 

The GDI team brings expertise in designing, building and launching new organizations and partnerships for social impact around the world.

The RIN will partner with 17 Asset Management, Dalberg, and the Government of Mexico to design and implement a $250 million fund, the Initiative for Inclusive Investment in Mexico (3IM). 3IM is a new cross-sector, cross-border partnership that will attract long-term strategic growth capital for investments in Mexico through the inclusion of displaced people in economic development projects. 

In partnership with the Economist Intelligence Unit, the RIN is developing the first-ever Refugee Opportunity Index that will define indicators on refugee integration and investment opportunities, incentivizing governments to make pro-refugee policy reforms.

Village Capital has developed Abaca, a platform that teaches refugee entrepreneurs how to think like an investor and evaluate their own company. Entrepreneurs access tools to advance their businesses and are placed on the Abaca platform where they can be matched with relevant investors. The RIN has integrated Abaca into our work with refugee entrepreneurs to support their growth and development. 

The International Rescue Committee, with support from the RIN, is launching a $5M Social Impact Fund to meet consumer and commercial needs of refugees and local communities. This fund aims to develop a pool of funds available to refugees and local communities, increasing access to affordable credit.

Key customers and beneficiaries: A range of investor types constitute the RIN's potential client base. The beneficiaries of the RIN include refugee ventures and their host communities. Refugee ventures include refugee owned, led, and supporting enterprises as well as refugee lending facilities and refugee funds.

Products & services provided: The RIN provides refugee ventures with tailored growth and development tools. In partnership with the RIN, Village Capital is deploying Abaca, a software platform integrated on the RIN’s website that teaches refugee entrepreneurs how to think like an investor, evaluate their own companies, and assess their relative strengths and weaknesses. They are then provided resources to strengthen their business models and governance structures and provided access to Abaca’s investor network. Qualifying refugee ventures are also onboarded onto our Investment Opportunities platform to showcase their enterprises to prospective investors. These RIN services to refugee ventures are free of charge. The RIN provides customized advisory services to investors, which initially includes an investment training curriculum and access to tailored refugee investment deals. Further development of our service offerings is in progress. The RIN charges fees to its clients.

The RIN is creating different pathways for revenue generation in order to reduce its reliance on donor funding. Our first step, is to provide customized advisory services to investors for a fee, enabling the RIN to reduce the need for grant funding and become self-reliant. The RIN will use catalytic funding in 2019 to position the organization to deliver its unique and world-class advisory services by 2020. Our five-year sustainability model aims to have the majority of our funding generated through advisory service fees by 2022.

As a collaborative organization dedicated to building a new field of investment, RIN is well positioned to benefit greatly from MIT Solve’s extensive network and in-house expertise. Whether in working to develop our services to refugee ventures, validate our business model and improve our fundraising, improve our impact evaluation standards, or refine our investor training curriculum, it is clear that MIT Solve is uniquely able to support organizations such as ours as we scale our solution to meet the challenges of forced displacement. 

As the RIN transitions from being fully funded by grants to a blended model including advisory services, the organization will face several challenges, which MIT Solve may help to address. Whether in identifying clients, clarifying our offerings, or promoting our previous work, we believe that MIT Solve could prove invaluable to the growth, scaling and professionalization of RIN. 

Indeed, access to MIT Solve’s network will enable us to refine our products, build momentum in the field of refugee investing, and identify potential clients. Such a process will enable the RIN to move quickly from a grant funding model to one focused more on advisory services. 

Over the course of the past year, RIN has developed strong ties in the humanitarian and development communities, receiving financial support (USA for UNHCR) and strategic speaking opportunities to present the RIN’s innovative model to bring the private sector to bear on the current refugee crisis to colleagues at the MFIs’ (World Bank, IFC, European Investment Fund, Inter-American Development Bank). The RIN has also effectively engaged with other key stakeholder groups, through speaking engagements and programing at major events like the Society for International Development (SID) Annual Conference; SOCAP18 when we announced the RIN and where we are playing a key planning role for the upcoming SOCAP19; at the Milken Global Conference; and, most recently at our well-publicized launch event on World Refugee Day (June 20) at the Rockefeller Foundation headquarters in New York City.

Although the RIN has also addressed investment communities in New York City, Washington and San Francisco, the depth, breadth and frequency of these interactions needs emphasis going forward. Indeed, as we build and grow the field of refugee investing our focus on investors must intensify; our Refugee Investment Curriculum must be disseminated broadly and taught with excellence; RIN needs to interact with VCs and fund advisors (consultants) to both learn from, and educate them on the possibilities and benefits of growing this new investment thematic. Similarly, RIN wants to engage with institutional capital, for example, within the faith-based community, and the impact community writ large to build and routinize refugee investing globally.

The RIN’s integrated investment opportunities platform empowers refugee ventures by providing them with the tools and messaging they need to communicate their financial potential and social impact to interested investors, while also highlighting the need for policy-level changes through our Refugee Opportunity Index (ROI). As the RIN continues to expand its work through programs such as the Initiative for Inclusive Investment in Mexico (3IM) and the Social Impact Fund in the United States, the organization will face several hurdles as it transitions its business model to be more focused on advisory services. 

The Innovation for Refugee Inclusion Prize will enable the RIN to expand its advisory practice, develop additional inclusive investment vehicles to improve the livelihoods of forcibly displaced populations, and expand its outreach to institutional capital, impact investors, and development finance institutions. By maintaining an integrated approach to our work, RIN will be able to build the field of refugee investing, mobilize $2 billion in investments, change policies that impact refugee livelihoods, and change the narrative surrounding the crisis of forced displacement. 

Being responsive to needs on the ground while remaining true to our mission has enabled RIN to grow through its first year of existence. The support of MIT Solve and the Innovation for Refugee Inclusion Prize will enable the organization to thrive and lead to the betterment of millions of lives.