Declining economic conditions, and a corrupt and oppressive political regime in Venezuela are the leading causes of a rapid increase in migration. Despite rich natural resources, the economy has been in decline since 2013, leading to hyperinflation, high unemployment, food scarcity and rapidly deteriorating social services. Economists interviewed by the New York Times have called the crisis “the Worst Outside of War in Decades".
The International Organization for Migration (IOM) estimates that nearly 7.2 million individuals have migrated from Venezuela , with an estimated 941,000 Venezuelan refugees and migrants in Peru and over 380,000 in Ecuador . Despite international pressure, the political, social and economic situation in Venezuela continues to decline, leaving migrants no choice but to stay and build a life in their new communities. Not only are Peru and Ecuador forced to address humanitarian needs, but the countries must also now address complex economic challenges including migrants’ legal rights to live and work, ensuring local economic integration, and preventing discrimination, gender-based violence, and xenophobia.
Understanding the need for rapid assistance to Peru and Ecuador, WOCCU, with funding from the United States Agency for International Development (USAID), is implementing an ambitious and innovative approach aimed at providing economic opportunities and financial services to assist both Venezuelan migrants and refuges and their host communities, particularly in Lima, Peru, and Quito and Guayaquil, Ecuador. During phase one of the Economic Inclusion Project (EIP), initiated in June 2020, 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.
Given EIP's success, in May 2023, USAID awarded an extension through May 2026. This extension will broaden the project's reach to an additional eight cities, including Trujillo, Arequipa, Ica, Tumbes and Callao in Peru and Manta, Machala and Cuenca in Ecuador.
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*
- 111,667 individuals connected with financial services
- 8,546 loans issued, amounting to $11,232,747
- 54% of all participants who have accessed financial services through EIP have been women, while 52% of all loans have been issued to women
- 15,598 individuals trained in financial education, 66% of whom are women and 56% are Venezuelans
*Data as of June 30, 2023
Launch of the financial inclusion guide in Ecuador
In May 2023, EIP and the Superintendency of Popular and Solidarity Economy (SEPS) in Ecuador launched the "Guide for the Financial Inclusion of the Refugee and Migrant Population in Ecuador" (Guía para la Inclusión Financiera de Personas en Movilidad Humana en Ecuador). More than 30 partner credit unions, NGOs and other stakeholders attended the event which highlighted the guide as a significant step towards promoting the financial inclusion of the Venezuelan population in Ecuador as well as encouraging socio-economic integration in the country.