Lev Plaves On Financially Supporting Entrepreneurs Who Have Become Refugees
Lev is the Investment Director for Kiva, an award-winning global non-profit organisation that provides microloans to marginalised communities around the world, including refugees.
With over 9 years of experience at Kiva and extensive experience working directly with refugees, Lev can speak to Kiva’s work of providing loans to refugees who have been rejected by traditional financial systems and expand on how refugee lending can be scaled and grown for the greater good.
Lev believes in the power of opportunity for improving lives. He’s especially passionate about refugee support and development, and brings a unique perspective on how we can use microfinance to make a real, lasting impact on the lives of people who are forcibly displaced.
Lev discusses how internet lenders are creating opportunities for increased financial inclusivity globally, and why microfinance is key to creating sustainable change for refugees and migrants.
Highlights from the interview (listen to the podcast for full details)
[Indio Myles] - To start off, could you please share a bit about your background and what led to your work in social finance and enterprise?
[Lev Plaves] - I actually started my career working in the Middle East and the non-profit sector for an organisation focused on youth. It was a youth empowerment organisation providing programming largely for young adults in the region. One of the key populations or groups that we worked with were those who had just graduated either high school or college, and one of the things I was struck by over and over again was the many incredible ideas and the entrepreneurial spirit among so much of the young population in the region. There was a common theme that despite these incredible ideas however, there was a gap around the access to financial services to be able to turn these ideas into a reality. That is what led me to Kiva. I first learned about Kiva and thought it was an incredible opportunity or incredible way for individuals like you and I to go and support individuals with a loan starting as low as $25. That's what first excited me about Kiva and eventually brought me within the organisation where I work today.
As the Investment Director of Kiva, can you expand on the organisation's activities and its social purpose?
Kiva was founded in 2005 in San Francisco. We're a global non-profit that envisions a financially inclusive world where all individuals hold the power to improve their lives. We do this by improving the quality of financial services and we unlock capital through our crowdfunding platform on the kiva.org website. In short, Kiva's really a marketplace; we are a fund where individual lenders, like you or I can connect with borrowers and entrepreneurs around the world by going onto our website and browsing profiles of thousands of individuals in close to 80 countries where we operate and lending as little as $25 to support an them in making a difference by starting a small business.
How is Kiva's work specifically serving refugees and displaced people?
Today, I think many of us know there are around 80 million people estimated to be forcibly displaced from their homes, which is a staggering number and unfortunately one that is only going to get worse with continuing conflict and climate change driving displacement. One of the things I've been struck by which has driven my own ideas in this work is this realisation that refugees are not a monolith. They're not a homogenous group. They have very different backgrounds, face different challenges and have different needs.
Refugees are not who they are, it is what has happened to them. But, like many of us, refugees are doctors, teachers, nurses, mothers, fathers, and so the needs really differ among what refugee populations need.
One of the things I saw from living in the Middle East is that humanitarian assistance often plays an initial and very critical role in responding to individuals once they've been forcibly displaced from their homes. It is certainly critical, but it is also not enough. The situation is so complex and the needs diverse among refugees that we also have to look for ways we can complement humanitarian assistance with longer term sustainable solutions. That's where I believe Kiva comes in. We're looking to support refugees who might have been in their new country for two- three years and are looking to rebuild their lives and move beyond aid or humanitarian assistance and need support to start or grow a small business. That's where Kiva comes in, because the sad reality is that most financial institutions, banks and microfinance lenders will not serve refugees because they're perceived to be too risky, so we're really looking to leverage the power of our website, the crowdfunding platform and our community of internet lenders to prove that refugee lending is not only viable but makes sense.
Why are loans an effective mechanism of creating social change compared to traditional donation models?
With the needs being so diverse among refugee populations, one solution is not enough. We need a whole group of organisations, efforts and people coming together to really address the global refugee crisis today. I think traditional donations and aid plays a critical role, but for many refugees, they are ready to move beyond that. As I mentioned, I was really struck not only by the entrepreneurial spirit I saw of the many youths in the Middle East I worked directly with, but since my time at Kiva, I spent the first five years working with them based in Istanbul. I spent a lot of time in Turkey, Jordan and Lebanon, three of the countries host to the largest number of Syrian refugees in the world today. I was struck by the entrepreneurial spirit I observed among the refugee populations in each of these countries who were really eager for opportunities to rebuild their lives in these countries; to start a small business, provide for their family, pay for their children to go to school and to pay for the health expenses of their families. That's really where we as Kiva believe that lending and loans come in. Moving beyond the humanitarian aspect of a crisis and helping refugees start a small business and begin to rebuild their lives and continue to settle into the country that they're now calling home.
What benefits are experienced by refugees who are receiving microfinance loans through the Kiva platform and by the people who are contributing to that fund?
I really like how you framed that question, because it certainly goes both ways. If we think about refugees to begin with (and I alluded to this a little bit), they are largely financially excluded.
Most financial institutions won't lend to them and that's because there's this perception that refugees are too risky to serve. They think they're going to flee to another country and are not going to repay their loans.
Most banks and even socially minded microfinance institutions are too concerned to actually start lending to refugees, and that's really where Kiva has come in, and what the experience of refugees receiving microfinance loans through Kiva is. We have mobilised our community of internet lenders from around the world. Again, these are people like you or I who come onto our platform and fill the gap that exists, because most refugees are not served by the formal financial sector. Since 2016, we've been crowdfunding loans to refugees all around the world. We've provided over $25 million to almost 30,000 refugees across the Middle East, Africa and Latin America, and are really working to prove that lending to refugees is not only the right thing to do but makes sense. What I mean by that is we've actually seen that refugees are repaying their loans at above 95%, pretty much the same repayment rate that we see on Kiva for our non-refugee lending. For us and the refugees, I think we've proven that lending or investing in refugees should not be perceived as more risky than other investments. In fact, it’s the same repayment rate and success that we see across the board. That's really what we're trying to do at Kiva, prove that investing in refugees make sense.
Then on the other hand, those who contribute to the fund are making a social investment that is catalysing lending to refugees and demonstrating that lending to refugees make sense. It's also a loan, not a donation. You go onto the platform, put in $25, pick the individual you want to lend to and support them to start or grow their small business, whether they live in Jordan, Uganda or Columbia. But that $25 takes the form of a loan, meaning that you eventually will be repaid and can recycle that $25 by choosing another entrepreneur say six months or a year later to invest in. It's this cycle of giving, lending, receiving repayments and continuing to move that $25 forward that I think is most powerful for the people who contribute on our website.
How can impact lead individuals, non-profit organisations and social businesses work towards supporting and being more financially inclusive of refugees globally and within their communities?
Especially on the individual level, one of the things that is so powerful about the Kiva platform is that anyone with a credit card can go onto our website, browse our platform and see refugees across the Middle East, East Africa and Latin America who are looking for loans. Anyone can go on and be part of this in providing loans to refugees that help improve their lives. But also, that demonstrates investing in refugees makes sense. I definitely welcome and encourage those who are interested to do that. Being able to really make that connection and pick who you make a loan to I think is one of the most powerful aspects. Beyond individuals, for organisations, foundations or companies, there are numerous ways to directly engage, support and work with Kiva. I'd encourage those who are interested to visit kiva.global to learn more and connect with our staff that way. Then I think, beyond Kiva, there are countless ways to think about this. I've mentioned over and over again that the global refugee crisis is one on a massive scale, and it's not a one size fits all solution.
Kiva and microfinance is one key piece, but certainly we are not enough on our own. I encourage organisations, companies and social businesses to think about the needs of refugees in their communities, how they can support and expand their work to reach them.
A lot of companies today are making more efforts to hire, reach or expand their services so that they reach refugees. There are many ways to think about this. Kiva is one specific way; we believe strongly in what we're doing and would love for people to support it. But there are many other ways to think about this issue and it will take this comprehensive effort to truly make a change in this crisis moving forward.
What inspiring projects or initiatives do you believe are creating a positive social change?
Certainly some of the most inspiring moments at my time at Kiva have been when I get out into the field and meet the refugees who we're serving and working with across the world. Broadly, I continue to be inspired by the entrepreneurial spirit of refugees. Again, refugees isn't who these people are at their core, it describes what has happened to them.
But one of the things I hear over and over again in the field from refugees is people saying, "I want to be seen as an entrepreneur, not as a refugee," and that's something that I think has really stuck with me and inspires me in my work.
I think specifically to one small business I visited in Lebanon. A Syrian refugee who had been displaced fairly early on in the conflict in Syria in 2013 or 2014 had fled to Lebanon thinking she'd be there with her family for a maximum of one or two months. Close to 10 years later, they're still there. She initially settled in a small mountainous village in Lebanon. The cost-of-living Lebanon is a lot higher than it was for them in Syria, and so she startedout of her home running a little beauty salon, doing makeup for women in the community before they were getting married to generate an income. It was great to see what she'd done, but it unfortunately was not enough for her, and so she ended up becoming really good friends with her neighbour, who was a Lebanese woman. This is I think one of the things that amazed me the most, these two women coming together, a Syrian refugee and a Lebanese national. There's often a lot of tension and animosity between these two groups, but these two people came together and took a loan funded on the Kiva platform by our internet lenders from around the world, and the loan helped buy wedding dresses which this woman (Samira) now has grown into a business outside of her home. In addition to doing makeup and hair styling, she rents wedding dresses out to other Syrian refugees in the community on their wedding day. These are brides who cannot afford the cost of a wedding dress, and this allows them to still have a dress and celebrate the wedding as they would like. One of the things that Samira mentioned to me is that through this loan, through growing her business with the support of her neighbour and Kiva, she was able to double her income from $300 a month to $600 a month. Again, when we think about entrepreneurialism, I think she's a great example of that. At her core, she is an entrepreneur rather than just a refugee. Unfortunately, I don't have a name for this enterprise. Many of the businesses we see, especially in the Middle East are small, more informal and have unregistered businesses, because it is so challenging for refugees.
To finish off, what books or resources would you recommend to our listeners?
First of all, whether or not you actually make a loan on Kiva, one of the great things about our website is you can browse the profiles of refugee entrepreneurs from all around the world and see the types of small businesses they're starting, what they're looking for from loans and the type of support they need. I definitely encourage folks to visit our website. Our blog has more in-depth stories and information on some of the specific refugees we've supported, so that's available directly through our blog. If I think about some of the works that have been most influential for me, t a documentary that I saw a few years ago called For Sama comes to mind. It is the story of a Syrian refugee who fled Aleppo. It's about her experience during the war in Syria, what it was like there, and then fleeing as a refugee. Her determination, grit and entrepreneurialism is something that has really stuck with me and has been an inspiration for my work, and so it's something I would definitely recommend to others. It's a difficult movie to watch, but incredibly powerful.
