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The Importance of Private Sector Investment in Refugee Populations

The Importance of Private Sector Investment in Refugee Populations

In 2016, I worked in Jordan for an NGO supporting Syrian refugees, where I saw firsthand the limbo in which many refugees live–unable to work, often unable to study, and knowing full well that they are seen as a burden on their host communities. Despite a growing number of case studies and reports arguing that refugees can and do contribute economically to the countries to which they flee, the conversation around refugees is still primarily one of emergency aid funds and concessionary capital. However, as conflicts continue and a generation has grown up without identity or employment, these grants alone are not sufficient to help refugees transition or achieve long-term stability.

Instead, what if we could galvanize investment capital toward these populations, the businesses they are looking to start and grow, and the economies in which they exist by making not the moral case but the economic one for investing in refugees?

Current research demonstrates that not only refugees are one of the world’s most under-invested yet highly performing populations, but that investing in refugee-supporting enterprises can result in economic gain and positive fund performance. Studies also show that access to professional advancement (through both investment and employment) provides critical security, identity, dignity, and livelihood for refugees. SEAF’s belief is that by investing in SMEs that are founded by, hire or provide services for refugees, the private sector can take on a leading role in helping these refugee communities receive the services they require, find much-needed stability in the face of uncertainty, and continue to develop professionally as they transition out of their refugee status—all while seeing financial returns.

Groups such as the Refugee Investment Network (RIN) are doing great work around the topic of investing in these populations, building out use cases and viable success stories, and working with leaders ranging from Wall Street to Capitol Hill to align social and financial incentives. At SOCAP18, an annual event that gathers more than 30,000 investment and social impact professionals, RIN announced the publication of its first case study on the economic opportunity of refugee-themed investment. The study includes a refugee-investment taxonomy that helps investors both understand the breadth of the migrant crisis as well as what investing in migrants might realistically entail and return in their portfolios. This announcement was followed by a commitment of over $200 million in investments committed to refugees. But clear investment processes are still very much needed to build upon this momentum.

As a result, I am excited to be working as a Summer Associate at SEAF, an innovative global private equity group that provides growth capital and business assistance to small and medium-sized enterprises (SMEs) in emerging markets that are underserved by traditional capital. Many of these markets are hosts to large refugee communities, many of whom are employees or entrepreneurs themselves. I will be spending my time at SEAF working to construct a framework to help guide investors on best practices for how to engage with these vulnerable populations that hold so much potential. I look forward to sharing this work with the wider impact investing community.





Grace Stone is a Summer Associate at SEAF, currently pursuing a joint MBA-MPA at Wharton and Harvard’s Kennedy School of Government.


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