Kiva Presentation for Foothill College Microfinance ClubPresentation Transcript
Kiva.org Foothill Microfinance Club February 23, 2011 Zack Turner @wzt
Who am I? Kiva Fellow in Kenya 2008 Kiva Staff 2008 - 2010
Who am I?
Who am I?
What is Kiva?
Kiva.org is a website which allows you to lend to an entrepreneur who needs a loan
Lend as little as $25 to an entrepreneur at 0% interest
What is Microfinance? Half the world lives on <$2/day Microfinance is the provision of financial services to the poor Microfinance = Savings, Insurance, Credit
Microfinance is the provision of financial services to the poor For many in the developing world, savings accounts take the form of livestock Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime. What if he knows how to fish, but just can’t afford a fishing net?
The poor are typically excluded by financial service providers:
No credit history
The poor need financial services, and already use them informally:
Borrowing money from loan sharks with interest rates so high that it may be impossible to ever pay back
Savings accounts kept in the home, vulnerable to theft
Investing in livestock which is vulnerable to disease
Microfinance works to provide the poor with these financial services, in a safe and controlled environment, through a microfinance institution What is Microfinance?
Some focus on women in places where women don’t have the same rights as men and so have no economic empowerment
Some focus on the rural population in areas where people are isolated and cannot travel to cities to access services
Some focus on a comprehensive program which includes business training with financial products
There are thousands of microfinance institutions around the world, and they all vary a little depending on the region they are in and people they are targeting to help What ties them all together, however, is a desire to help the poor by providing them with financial services
How Does Kiva Fit in? Banks and NGOs
Microfinance institutions typically get the money that they lend, from banks or non-governmental organizations, or both
This can be expensive , as it is often borrowed with interest
There may also be difficult application procedures to access debt capital from non-governmental organizations
Some organizations can even find themselves shut out due to the region they operate in, particularly post-conflict regions
Restrictions that microfinance institutions face ultimately affect the entrepreneurs, who rely on microfinance institutions to serve them
The Traditional Microfinance Lending Process Microfinance Institutions Entrepreneurs
Provides Capital for MFI Sources of Funding How Does Kiva Fit in? Individual lenders and donors Gifts-in-kind, Commercial Lenders Government grants Major Donors, Churches, Foundations, Corporations
How Kiva works Internet Lender Online marketplace Local Partner (MFI) Entrepreneur Money Information
“ Kiva in a Box”: The Big Picture
Why Does Kiva Matter? Value for all Stakeholders: More Borrowers Receive Loans MFIs have more capital Lenders have easy and effective ways to give Changing perceptions of the developing world Breaking the bottleneck of wealth / poverty Doing this at scale Borrower MFI Lender Kiva Mutual Value
884,779+ social investors have lent $194,979,000 million in 54 months
Other Key Stats
Growth: $1.8 M loans every 7 days or $6 million per month
Risk: 98.95% repayment rate / $381 avg loan size
Traffic: 250,000 site visitors a week.
Organization: 60 employees and 500+ volunteers
Leverage: Platform raises $10 in loans for every $1 donated.
5yr goal = $1 Billion
Where is Kiva today? Mexico Guatemala Honduras Nicaragua Haiti Dominican Republic Samoa Ecuador Peru Bolivia Paraguay Senegal Sierra Leone Cote d’Ivoire Ghana Togo Nigeria Cameroon DRC Mozambique Tanzania Kenya Uganda South Sudan Indonesia Vietnam Cambodia Nepal Pakistan Afghanistan Tajikistan Lebanon Gaza Iraq Azerbaijan Ukraine Moldova Bosnia Bulgaria Kiva has lent over $ 194 million in loans through 126 Microfinance Partners in 58 countries and is still growing United States Chile Mongolia South Africa
Why Does Kiva Work? It is about connecting people Stories Technology Viral Accessible Press Crowdsourcing Transparency & data
New loan categories Scale Break Even Innovate $1 Billion for 2M borrowers Self-sufficiency at scale The next 5 years: 3 aspirations
Interesting Facts Kiva is international (lenders from 210 countries) Equal playing field High Risk Areas: Iraq, DRC, Palestine Unique Loan Products Proliferation of Technology
Make a $25 Loan
Give a $25 Kiva Gift Certificate
Spread the Word! (email footer, add Kiva to your blog, join Facebook cause, follow Kiva on Twitter)
Start a Lending Team (join an existing team, start your own team with family and friends)
Get Involved Today!
Become a Kiva Fellow! - Work overseas with one of Kiva’s Field Partners to help facilitate connections between Kiva Lenders and Borrowers http://www.kiva.org/fellows Join Kiva’s Loan Review & Translation team - Volunteer your time remotely to help review and translate loan profiles that are posted by our Field Partners http://www.kiva.org/volunteer Intern in Kiva’s San Francisco Headquarters - Volunteer with Kiva in a part-time capacity for 4-8 months, it’s a great opportunity to learn more about Kiva’s model http://www.kiva.org/volunteer Join Kiva’s Developer Community - Are you a developer, designer or tech-fanatic? Learn more about our API and join our awesome developer community! http://build.kiva.org/ Take it to the Next Level: Want to get more involved or know someone who might?
Zack Turner KF5 @wzt www.kiva.org Loans that Change Lives
Result: 30,245,763 loans found Kiva and “Increasing Returns on Data” World’s largest DB of microfinance investments Long Term : Entrepreneurs could use Kiva as a public credit bureau… Short Term : MFIs could use Kiva to build credit worthiness to other funders…
Reach “The Long Tail’ “ The Long Tail”
Kiva can uniquely reach the microfinance ‘long tail’
The Internet is a promising way to reduce costs and distribute risk in investing in smaller (Tier II - Tier IV) Microfinance Institutions.
Tier I (e.g. Grameen Bank) ----- Tier IV (e.g. church congregation) Current distribution of funds in microfinance Could Kiva help discover and scale the next Grameen Bank?
Kiva’s platform can aggregate and deliver risk capital unlike any commercial source
Kiva lenders value social return / tolerate risk more than institutions
$25 investments size ensures risk distribution across thousands of investors
Less established MFIs can build a reputation slowly over time (like on eBay)