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Kiva U.S. Loans Impact Analysis

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  • For now Kiva's expansion to the first world is limited to the US. Nevertheless, Kiva has expressed the desire for their platform to go global. If their launch in America is any indication, such a push will bode well for contributions to and interest in Kiva; borrowers overall and abroad received a record amount of funds from Kiva lenders this June.


    I work for ACCION USA, one of Kiva's two US field partners responsible for administering loans and screening clients. Our participation in Kiva's domestic launch has been very exciting for us, attracting new clients and allowing us to facilitate many more loans.


    AUSA believes passionately in the value of small business and accessible credit, having offered domestic microloans now for over a decade. With the ability to enrich communities, empower individuals, and increase economic opportunities, small businesses constitute a vital sector of our economy.


    Credit has always been scarce for small business owners, but in the heat of the financial crisis, it has all but evaporated. Many of our borrowers have suffered from medical debt or labored in a difficult job with little potential for advancement. The chance to own a prosperous small business is a massive opportunity for them. We're glad to assist worthy entrepreneurs.


    To learn more about ACCION USA’s operations, please check out our online resources documenting the impact of our loans (http://www.accionusa.org). If you'd like to discuss anything I've written, reach out to me at hocking at bc dot edu. Also feel free to follow our blog (http://www.accionusa.org/blog) and our twitter account (@ACCION_USA)!
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  • I am recently got involved with KIva

    I have started funding overseas Entrepreneurs

    As an immigrant and an Entrepreneurr in the US , I also want to give back to
    my other Entrepreneurs in the US. Kiva is an ideal platform to do this

    I very strongly believe that Overseas funding will only be enhanced as like me there
    will be others who will continue with the overseas funding. Your stats will easily show that.

    I strongly urge to scale your US operations. There are thousands of Entrepreneur
    who need it now !!
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  • I hope Kiva comes to Japan as well.
       Reply 
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    Your message goes here
  • Be the first to like this

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  • 1. Kiva's Pilot United States Expansion July 15, 2009
  • 2. Introduction Agenda for this Community Conference Call There are 2 purposes to this call: • To share with the Kiva community some of the data we’ve collected around the U.S. pilot • To receive feedback directly from the Kiva community Agenda: 6. Introduction 7. Summary of what we have learned since June 10 8. Background 9. What happened 10. Detail of what we have learned since June 10 11. Your feedback Note: Kiva will post a response to the Kiva Blog after on July 23.
  • 3. Summary What we have learned since June 10 • The Kiva community is divided in opinion about the U.S. pilot • The U.S. pilot has attracted more “new money” • The U.S. pilot drove an increase in new-user sign-up • The U.S. pilot attracted new lenders for all countries • U.S. Focused Lenders also lent to developing countries • “Core Kiva Lenders” continued to lend more • The donation rate has continued to be stable • U.S. loans funding rate is slightly above average
  • 4. Background Kiva’s 2009 Growth Strategy Each year Kiva sets internal goals for the number of new Field Partners and countries to be added to the global portfolio. 2009: • Approximately 30 New Partners planned • 6 New Countries • Total loans funded target of $60 million • Community Conference Calls have highlighted interest in certain new countries
  • 5. Background June Portfolio Growth • 8 New Kiva Field Partners added – 2 in the United States – 6 in other countries • 3 New countries added in June – United States – Kyrgyzstan – Liberia • Kiva re-entered Ecuador
  • 6. Background Global Portfolio United States 1.2% Cambodia (14.3%) Tajikistan (8.9%) • June’s growth increased Kiva’s global portfolio to 48 countries • Kiva’s global portfolio enforces limits to the total share held by any one country, to ensure a balanced porfolio and minimize risk – For example, for the U.S. pilot launch, all U.S. loans currently can not exceed 5% of the global portfolio • Country limits are enforced by Field Partner limits – ACCION USA has a total outstanding loans limit of $550k – Opportunity Fund has a total outstanding loans limit of $250k
  • 7. What happened June 10, 2009: First U.S. loans posted on Kiva.org • 2 new U.S. Field Partners were added to the portfolio – Accion USA (New York) – Opportunity Fund (Bay Area) • 39 loans to U.S. borrowers were posted to the Kiva website in June • The total of loans to U.S. borrowers in June was $224,775 • The average loan size of June U.S. loans was $5,763 • All loans part of the initial launch were completely funded within 18 days
  • 8. What happened Feedback from community • There have been mixed reactions coming from the Kiva lender community “I feel somewhat betrayed by the “Keep up your wonderful introduction of loans to US work....Kiva: Loans That Change entrepreneurs” Lives...that's what we are all doing, isn't it?” “I do not believe loans to US people follows the intent of Kiva’s “I don't think that a struggling mission statement” small-scale entrepreneur is more worthy because she lives in “you have changed the mission of America, but neither is she less Kiva from one WE ALL agreed on worthy” when we joined, to one that adds a totally new dimension, stress on “Thanks for giving us the choice resources and competition to lend or to not lend to US between the loans.” entrepreneurs.” So far the US launch poll has resulted in 48% yes and 44% no, with 9% not sure
  • 9. What happened June was a record month for Kiva US loans Africa $224,775 Asia Eastern Europe Middle East Lat-Am USA Total funded: $4,640,475 Total funded: $4,906,800 Excluding US: $4,682,025 4.6% of loans raised in June on the Kiva site were for US borrowers Excluding the U.S. loans, more loans were made to developing world entrepreneurs in June, than ever before: $4,682,025
  • 10. What we have learned The U.S. pilot has attracted more “new money” • Kiva Loans are funded by new money loaned, or by re-cycling repaid Kiva Credit • However the availability of US loans is a source for bringing more people and more money from the same people Pre-launch average: Post-launch $51.4k average: $60.8k Daily Deposits Since the launch, average daily deposits (“new money”) over one month have been 18% higher than the average for four months prior
  • 11. What we have learned The U.S. pilot drove an increase in new-user sign-up • New user sign-up tends to be higher at the start of the year but stays pretty consistent from March to July • In 2009 there has been an increase in sign-ups in the month post-U.S.-launch as compared to the three months leading up to it US launch 2009: 14.7k / month 2009: 20.4k (+39%) 2008: 13.2k / month 2008: 12.3k (-6%) 2009 new users 2008 new users • Every month Kiva has about 14,693 new users sign-up on the Kiva website • The one month period after launching in the USA saw a new-user sign-up of 20,380
  • 12. What we have learned The U.S. pilot attracted new lenders for all countries • During the first week of the USA launch there was an unprecedented sharp increase in new lenders joining the Kiva website • On average, 479 new users signed up per day, in the 3 months before the U.S. pilot launch • On June 10 and 11, a total of 4,795 new Kiva users signed up. • Of the 4,795 new users on June 10 and June 11, 72% of loans they made in the next 30 days were to developing country entrepreneurs Africa Asia Eastern Europe Middle East Lat-Am USA Note: By focusing on new lenders who signed up June 10 and June 11, we can identify users who signed up as a result of visibility of the U.S. pilot launch.
  • 13. What we have learned U.S. Focused Lenders also lent to developing countries • There were 854 Kiva Lenders who made their first Kiva Loan (in the 30 days following the U.S. pilot launch), to a U.S. entrepreneur. • 26% of the loans these new lenders made in the next 30 days, were to developing country entrepreneurs. • There is a tendency for any Kiva lender, including the U.S. drawn lenders, to diversify and also make loans to other people who may not fit the primary reason they came to the website Out of all lenders in this group, in the first month post-US-launch: - 14% made loans to at least one other country Africa - 6% made loans to at least five other countries Asia Eastern Europe Middle East Lat-Am USA
  • 14. What we have learned “Core Kiva Lenders” continued to lend more • A “Core Kiva Lender” is a lender who: – Lends at least 100 dollars every month – Has consistently loaned every month for the last 6 months • There are 1487 ”Core Kiva Lenders”. These lenders continued to increase their lending in the month post U.S. pilot launch Average Loans $
  • 15. What we have learned The donation rate has continued to be stable • Kiva measures donations made to Kiva relative to total loans made on the website. (For example, if in one day $100,000 of loans were made, and $6,000 donated to Kiva, we measure this as a donation rate of 6%) • It is important for Kiva’s long-term viability to continue to see stability and growth in its donations from lenders $ donated / $ loaned Donation Rate The rate of donation has been going up and down in recent time. In the month post U.S. pilot launch it was a little higher than the month before the U.S. launch
  • 16. What we have learned U.S. loans funding rate is slightly above average Funding Rate Hours / Dollar The USA loans fund faster than about two-thirds of the Kiva portfolio
  • 17. Feedback We want to hear from you! To share your feedback and comments, please use the web conference system to “Raise Your Hand” (Click on the “Raise Your Hand” button on this screen, and use the chat feature to send the moderator your phone number so that your phone line can be unmuted. Your phone number will only be visible by the moderator.)
  • 18. Appendix 1: Comments from Community poll ‘Do you support Kiva's decision to allow loan requests from the US?’ Theme Number of comments Lender choice is important 87 Poverty is relative 62 Brand dilution 49 Charity begins at home 39 US not truly impoverished 35 Stealing from the developing world 28 Creativity within Kiva is important 10 Kiva in US won’t be successful (b/c 6 default rates, loan amounts too high) Goes against capitalism (?) 3 • What this tells us: Which themes are most important to lenders • What this doesn’t tell us: How each theme relates to someone’s overall opinion of whether or not they support the US launch. For example, – someone could not support the launch, yet still think lender choice is important – someone could support the US launch, but also be concerned about brand dilution