$13.5M DEVELOPMENT IMPACT BOND FOR REFUGEES EXCEEDS EXPECTATIONS

Third-party evaluation of payment metrics shows a significant impact on active income-generating activity among refugees and vulnerable host communities in Cohort 1

AMMAN, Jordan, Nov. 29, 2023 /PRNewswire/ -- The IKEA Foundation, Novo Nordisk Foundation, Norad, the U.S. International Development Finance Corporation (DFC), Ferd, and KOIS have received its first payment-linked evaluation results of the 'Refugee Impact Bond' (DIB) launched in Jordan in October 2021. The DIB funds a micro-enterprise creation program delivered by Near East Foundation (NEF) to help vulnerable Jordanians and Syrian refugees recover their livelihoods and build their resilience. 

In May and June 2023, the Refugee DIB's independent evaluator, Mathematica, surveyed a sample of grantees from the program's first cohort. The survey measured various outcomes related to grantees' businesses, as well as their employment status and income from employment. Survey findings showed that 98.5 percent of the first cohort of grantees remained engaged in an active income-generating activity, significantly exceeding the target set for the DIB's primary payment metric.

• The payment metric was high across demographic subgroups, remaining above 98 percent for both genders, refugees and Jordanians, and youth and adults.
• Most respondents with active businesses reported that their businesses generated positive revenues, with 9 in 10 grantees reporting that their businesses generated profits during the calendar month preceding the survey.
• Respondents with active businesses reported an average estimated monthly profit of JOD 130 from their businesses, with an average take-home business income of JOD 89 per month. This finding confirms the importance of investing in refugee livelihoods, as it delivers sustainable results that have a direct benefit at the individual and community levels.

"The extraordinary results serve as a testament to the hard work of the NEF Jordan team and the unique structuring of the DIB, which allows for flexibility in programming and a focus on impact," said Jonathan Peters, Director of Programmes at Near East Foundation.

Mathematica will survey the program's second cohort of grantees in February 2024.

About the Refugee DIB 

Worldwide, conflict and climate crises are forcing more people than ever from their homes, with displacement and its impacts lasting years beyond the crisis. The Syrian conflict has driven 6.6 million people to flee Syria, with 80% settling in neighboring countries. Lebanon has the world's largest refugee population per capita, and Jordan is the fifth largest. This puts a strain on local economies and infrastructure. It also leaves refugees and their host communities struggling to access safe and dignified work, basic services, and affordable housing. 

Refugees and vulnerable communities need to be able to develop skills, earn an income, and become self-reliant once again. As well as improving their well-being, this can transform a host country's demographic expansion into an economic opportunity. It can also support refugees' economic inclusion in their home country or a third country in case of return or resettlement. 

To be effective, job creation programs in humanitarian settings must be tailored to diverse community needs and adaptable to local contexts. A DIB addresses three key issues affecting livelihood programs in humanitarian settings. It offers a multi-year funding commitment, which frees the program from annual grant cycles. It enables the Delivery Partner to innovate and adapt delivery to a changing context when needed. Finally, donor risk is reduced by tying payments to the results of a rigorous and independent evaluation of outcomes.

DFC, through its Portfolio for Impact and Innovation (PI²) Initiative, and Ferd have provided a four-year results-based upfront investment to fund a vocational, entrepreneurship and resilience-building project. This supports at least 4,380 refugee and host population trainees and provides 3,400 business start-up grants in Jordan. Communities with large refugee populations are selected based on higher than national average rates of food insecurity, poverty, indebtedness, and unemployment. Women and youth, who are disproportionately impacted by crises, take priority. 

The program aims to improve business survival and the ability of households to meet their basic needs. These outcomes are assessed by the DIB's independent evaluator, Mathematica. Maximum success will generate a 5.1% annualized return for investors. NEF is also incentivized through outcome payments tied to the level of success achieved.

By focusing on lasting outcomes, empowering NEF and sharing learnings, the 'Refugee Impact Bond' can deliver a cost-effective and transformative impact. The DIB partners hope it will become a template to help humanitarian actors and impacted communities better respond to the impacts of forced displacement and protracted crises. 

Fundraising for the second tranche of the DIB focused on Lebanon, is underway.

A learning seminar, which will include a presentation on the DIB, will take place in early 2024. If you would like to attend, please contact [email protected] and [email protected].

SOURCE Near East Foundation