September 26, 2016 Finance for Integration

Models

There are at least four types of social finance models that could be applied or that are already being applied to address needs in the settlement and integration sector.

Micro-loans for Migrants

Micro-loan funds and programs provide migrants with access to affordable finance. Often, they support migrant entrepreneurs or professionally trained migrants to access certification leading to employment in their field.

SME Finance

Migrants are often excluded from traditional sources of capital due to a lack of credit history and collateral, low-income levels, and in some cases, discrimination. SME loan programs provide migrant-owned businesses with access to capital to grow. These loans are larger than micro-finance programs.

Social Investment Funds

SIFs act as intermediaries by pooling capital from a variety of sources and investing in social sector organizations and projects. SIFs can be used to invest in organizations and projects that face barriers to accessing finance from traditional channels and that provide services or products that benefit migrants.

Pay-for-Performance Contracts

P4P involves governments making payments to service providers or intermediaries on the basis of achieving pre-agreed performance targets. The government pays only for the results that are achieved, thereby shifting risk of failure to the private sector. P4Ps can encourage innovation in service delivery.