Venezuela’s political and economic crises continue to lead Venezuelans to leave their country. As of August 2023, more than 7.7 million individuals have migrated from Venezuela, with an estimated 1.54 million Venezuelan refugees and migrants in Peru and 474,900 in Ecuador. Despite international pressure and alleged economic improvement, the situation in Venezuela continues to deteriorate, leaving Venezuelan migrants and refugees with little hope of returning to their country and prompting most to build a new life in their host countries
For its part, host countries continue to experience growing political instability, inequality, social upheaval and a surge in violence and crime, which exposes migrants and refugees to increased unemployment, heightened gender-based violence (GBV), and xenophobia. In addition, hosting large numbers of Venezuelan refugees and migrants, both Peru and Ecuador face several key issues related to this crisis, including addressing the legal rights of migrants to reside, work, and/or own a business in their new country and access financial services to ensure migrants’ economic and social integration.
Unemployment and informality continue to greatly impact host country nationals and Venezuelan migrants and refugees. Data from Peru’s latest National Employment Survey, released in September 2023, shows that unemployment reached 5.3%, a 1.1% increase from the same period last year, with 72.7% informal workers of the more than 17 million people employed in the country . Similarly, in Ecuador, during FY23 Quarter 2 (Q2), the national unemployment rate reached 3.8%, with 52.1% of workers relying on the informal economy .
Understanding the need for rapid assistance to Peru and Ecuador, WOCCU, with funding from the United States Agency for International Development (USAID), is implementing the Economic Inclusion Project (EIP), an ambitious and innovative approach aimed at providing economic opportunities and financial services to assist both Venezuelan migrants and refuges and their host communities in the target cities of Lima in Peru and Quito and Guayaquil in Ecuador. Given EIP's success, in May 2023, USAID awarded an extension through May 2026. With the project extension, EIP will expand implementation to include Trujillo, Arequipa, Ica, Piura, and Callao in Peru, and Manta, Ibarra, and Cuenca in Ecuador. These geographies were selected due to the large population of Venezuelan refugees and migrants.
During phase one of EIP, initiated in June 2020 until March 2023, 109,679 individuals obtained formal financial services, 15,120 individuals received financial education and literacy training, 12,278 Venezuelan migrants and locals accessed entrepreneurship or employment opportunities, and 2,037 Venezuelans received support for revalidating their diplomas, or professional or technical degree certifications.
Some key target goals for phase two include providing an additional:
- 140,000 Venezuelans and locals with access to formal financial services.
- 17,000 individuals with entrepreneurship and employment opportunities.
- 6,000 Venezuelans with support to revalidate their professional or technical degrees and certifications.
To reach its goal, EIP has adapted and implemented entrepreneurship (Objective 1) and employment (Objective 2) training programs targeted at migrants and refugees considered above the level of immediate vulnerability. WOCCU also works with its trusted network of credit union, NGO, and private sector partners to extend new or adapted financial products and services to vulnerable Venezuelans and local populations (Objective 3).
In response to the significant impact that gender disparities have on economic independence and stability, EIP has integrated gender inclusion into the three objectives outlined above. Additionally, EIP delivers critical GBV prevention and accompaniment.
In addition to these objectives and cross-cutting theme, phase two of EIP will also prioritize:
- Programs and strategies that allow for the inclusion of youth and LGBTQI+ communities.
- Capacity-building for credit unions and other local organizations.
- Climate change adaptation and mitigation through the promotion of green entrepreneurial businesses, jobs and financial products.
Through this objective, the Economic Inclusion Project will work to support credit unions and other financial institutions to develop new or adapt existing products and services that meet the needs of Venezuelan migrants and local nationals.
Designed to be responsive to the findings of the financial inclusion study, EIP’s financial inclusion methodology is founded on the premise of enabling access and use of financial products and services, particularly those that respond to EIP’s target population needs. To implement this methodology, EIP works closely with a strong network of financial institutions, working side-by-side with each institution to reduce barriers to access and inclusion, develop new and responsive tools, improve processes, revise policies and procedures, implement new or adapted methodologies, and strengthen staff skills and knowledge. Through EIP’s financial education training, EIP participants learn the fundamentals of personal and business financial management before being connected to the financial services sector. This approach ensures that when participants and institutions are linked, both are well prepared and educated on the other’s needs and requirements. Through the following approach, we expect that over 140,000 individuals will have access to financial services by the end of the project's phase two.
Figure 3: WOCCU's Financial Inclusion Methodology
Results to Date*
- 123,952 individuals connected with financial services
- 9,177 loans issued, amounting to $12,300,366
- 17,082 individuals trained in financial education, 66% of whom are women and 56% are Venezuelans
*Data as of September 30, 2023
“I tried to open a savings account with another institution, but the process was very difficult. Now, thanks to [EIP], I finally have my [debit] card. This will help me have more opportunities in the job market.”
Leyla is a Venezuelan migrant who arrived in Peru in 2019 with her young child. She was able to achieve financial inclusion as part of the pilot campaign organized by EIP and Banco de la Nación to promote opening savings accounts for migrants.