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Work category Intent: Bring lenders and small entrepreneurs together to aggregate loans into a major center of person-to-person micro-finance. Kiva executives have set $1 billion from 1 million lenders as their goal.
Kiva.org of San Francisco, California, USA, is the world’s first person-to-person micro-lending Web site. It empowers people to lend directly to unique, small entrepreneurs in many parts of the world. As we enter the weekend of INDEX:Award 2009 events, Kiva.org will have lent more than US$87 million to developing-world entrepreneurs, micro-finance loans made by some 500,000 online participants, most of whom make loans of $25 at a time.
Currently, lenders at Kiva.org are not paid interest as entrepreneurs pay back the money. The site does, however, have a 98-percent payback rate. Once a lender’s money has been returned, that lender has the option of removing it from the Kiva system or re-loaning it to other entrepreneurs. To choose an entrepreneur, users search by region, gender and business sector. The user selects a loan applicant and how much funding to provide. The organization has built up a network of more than 100 intermediary micro-finance partners, who process applications, loans and paybacks, to and from the Kiva system.
Earlier this year, Kiva opened lending to entrepreneurs in the United States, making the country the 52nd nation in Kiva’s system of loan recipients.
The move is controversial in some quarters, critics saying the Kiva mission is best limited to the developing world. Kiva co-founder Matt Flannery – originally a programmer with TiVo in California – responds, “I’m excited about it (the US lending) because it represents a further blurring of the lines in people’s minds. That’s a big part of our philosophy, we want to break down people’s categories, to educate people. They tend to think, ‘Oh, there’s rich countries and there’s poor countries and the people in them are totally different.’ … Now I can walk down the street and visit a Kiva loan recipient a couple of blocks from my house.”
INDEX: jurors point out that while the Kiva.org site is not exceptional as a web creation, its success in scaling small loans to create such heft
in aggregate funding is its genius.
INDEX:Award recipient Premal Shah, President of Kiva, is formerly an executive with eBay’s financial-processing company PayPal – which pro-
vides the online processing of Kiva’s loans, from a user’s credit card to the redeposit of repayments into that user’s account.
“Kiva’s a website,” says Shah, “for everyone who experiences the kind of daily financial crisis of food insecurity, of not having access to capital, of basically having an uncertain future. Now you can be a business partner with them, not their donor, and actually partner with them to get them out of poverty.”
How to spend 100.000 Euro on more design to improve life
The President of Kiva, Premal Shah, says that the plan is to invest half of the prize in expanding Kiva and making it easier to use by for example adding a service that allows users to upload photos with their mobile phones and MMS.“Wikipedia has really expanded to be quite helpful in our daily life to democratize access to information. Kiva has that potential in democratizing access to capital, so we want to make investments in technology. ”The other 50.000 Euro, Kiva is going to give back to the INDEX: jury and let them invest 25 dollars at a time in different entrepreneurs.“This will have a huge impact,” stresses Premal Shah.
Designed by:
Kiva.org Co-founded by:
Matt Flannery and Jessica Jackley, San Fransisco, California, USA KIVA.ORG |
