ImpactAlpha published a feature discussing the current surge in global forced migration and how Developing World Markets and its Displaced Communities Fund (DCF) seek to address the increased need for financial services for displaced people.
As of last year, there were 84 million forcibly displaced people around the world, a figure that may reach 300 million by 2030 if trends continue. Partner Aleem Remtula spoke with ImpactAlpha about how the fund’s investments will meet the financial needs of displaced communities through new products, underwriting methods, distribution channels and marketing initiatives. The fund intends to make equity investments to improve financial services for refugees in Uganda, Kenya, Ethiopia, Nigeria, Jordan, Pakistan and Colombia. Notably, the fund will tie managers’ compensation to the achievement of impact goals, making it one of only a few in the market to explicitly align incentives with impact intentions.
Financial inclusion, Remtula says, “is one of the few sectors in impact that actually has a long and steady track record through multiple cycles and incorporates political, climate and regulatory risks.” As economies emerge from the pandemic, increased borrower demand translates to the need for increased investments to support financial institutions serving these vulnerable populations, and Remtula estimates that such institutions will need more than $200 million in new equity capital in the next 18 months.
Read the full article on ImpactAlpha.