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Nslc 2010 kiva hs


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Nslc 2010 kiva hs

  1. 1. NSLC 2010 Premal Shah President Kiva Parth Shah National Director Kiva High School "Revolutionising how donors and lenders in the US are connecting with small entrepreneurs in developing countries”
  2. 2. What is Microfinance? <ul><li>Microfinance = small capital </li></ul><ul><li>The poor are typically excluded by financial service providers: </li></ul><ul><li>• No collateral </li></ul><ul><li>• No credit history </li></ul><ul><li>• Illiteracy </li></ul><ul><li>The poor need financial services, and already use them informally: </li></ul><ul><li>• Borrowing money from loan sharks with interest rates so high </li></ul><ul><li>that it may be impossible to ever pay back </li></ul><ul><li>• Savings accounts kept in the home, vulnerable to theft </li></ul><ul><li>• Investing in livestock which is vulnerable to disease </li></ul><ul><li>Microfinance works to provide the poor with these financial services, in a </li></ul><ul><li>Safe and controlled environment, through a microfinance institution </li></ul><ul><li>Give a man a fish, feed him for a day. </li></ul><ul><li>Teach a man to fish, feed him for a lifetime. </li></ul><ul><li>What if he knows how to fish, </li></ul><ul><li>but just can’t afford a fishing net? </li></ul>
  3. 3. Microfinance Institutions <ul><li>Some focus on women in places where women don’t have the same rights as men and so have no economic empowerment </li></ul><ul><li>Some focus on the rural population in areas where people are isolated and cannot travel to cities to access services </li></ul><ul><li>Some focus on a comprehensive program which includes business training with financial products </li></ul>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
  4. 4. Traditional Microfinance Lending Process
  5. 5. Why loans rather than charity? <ul><li>Dignified Business Transaction </li></ul><ul><li>Spreading opportunity, rather than charity </li></ul><ul><li>Sustainable </li></ul><ul><ul><li>A Hand-up not a hand-out! </li></ul></ul><ul><ul><li>Spreading opportunity rather than spreading wealth </li></ul></ul>
  6. 6. &quot;Don't ask what the world needs, do what makes you come alive; because what the world needs most are people who have come alive.&quot; -- Howard Thurman Guiding personal principle
  7. 7. Sophomore slump 20 “ Alive-ness” Key milestones and how ‘alive’ I felt SEWA Research Project Management Consultant in New York Joined small start up: PayPal Personal discovery of Microfinance Leave for PayPal acquired by eBay Big company – “do I matter?” angst “ I got this idea” OMG it’s working! 33 Age
  8. 8. Kiva 101 Internet Lender Online marketplace Local Partner (MFI) Entrepreneur Money Information
  9. 9. 550K people lent $120M to 200K entrepreneurs in 4 years <ul><li>Other Key Stats </li></ul><ul><li>Growth: $1M loans every week </li></ul><ul><li>Repayment Rate: 97% </li></ul><ul><li>Recycle Rate: 65% </li></ul><ul><li>MFI Portfolio: 115 MFIs in 50 countries. Growing 3 a month. </li></ul><ul><li>Traffic: 40,000 visitors / daily </li></ul><ul><li>Organization: 35 employees / 500 volunteers </li></ul><ul><li>Leverage: $10 in loans for every $1 donated. </li></ul>5 yr goal = $1 Billion
  10. 10. Kiva utilizes 4 “Web 2.0” principles <ul><li>Create an “ Addictive ” User Experience </li></ul><ul><li>Be “ Radically Transparent ” </li></ul><ul><li>“ Crowdsource ” against constraints </li></ul><ul><li>Build in “ increasing returns on data ” </li></ul>
  11. 11. Create an “Addictive” User Experience <ul><li>“ Addictive” = Easy + Fun </li></ul>
  12. 12. How Kiva tries to make it “Easy” Designed for everyday people, not affluent experts “ I can see the person I’m lending to…” Low cost to entry Business relationship based on mutual dignity, not pity Quick and easy checkout
  13. 13. How Kiva tries to make it “Fun” Badging, Teams, fast changing UGC, stats... Loans are fully funded in hours Transactions happen every 18 seconds… Real time un-edited updates… Randomized “1 minute of fame “ + Lending Teams…
  14. 14. For some, Kiva is becoming very addictive!
  15. 15. Be ‘Radically Transparent’ Transparency  Authenticity  Trust
  16. 16. Kiva and Radical Transparency Paying for Kiva’s overhead is an explicit choice
  17. 17. Kiva and Radical Transparency Data inaccuracy and defaults are made explicit
  18. 18. “ Crowdsource” against constraints Big constraint? + No resources? = Crowdsource
  19. 19. Kiva and “Crowdsourcing” Kiva Fellows Program How do we train MFIs, gather progress updates and verify data accuracy hyper-fast?
  20. 20. Kiva and “Crowdsourcing” Kiva Translator Program How do we immediately translate entrepreneur profiles from native language to English?
  21. 21. Build in “Increasing Returns on Data” Leading public platform + Data integrity  “ Increasing Returns on Data”
  22. 22. Public reputation system for MFI Risk and Social Performance Social Rating Risk Rating Kiva Social Rating Kiva Risk Rating
  23. 23. 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…
  24. 24. Kiva High School <ul><li>Mission - to bring together and organize high school students interested in fighting poverty on both a local and national scale. </li></ul><ul><li>How does Kiva High School Work? </li></ul><ul><li>Starter-Kit </li></ul><ul><ul><li>What is Kiva/Microfinance/Kiva High School? </li></ul></ul><ul><ul><li>How to setup a chapter </li></ul></ul><ul><ul><li>Chapter fundraising ideas </li></ul></ul><ul><ul><li>Chapter finances </li></ul></ul>
  25. 25. Kiva High School <ul><li>What does Kiva High School bring to your school? </li></ul><ul><ul><li>Awareness of global issues such as poverty </li></ul></ul><ul><ul><li>Give high school students a platform to make a powerful impact </li></ul></ul><ul><ul><li>Show the capacity of microfinance and the ripple effects of your loan </li></ul></ul><ul><ul><li>A network of like-minded students that are unified through a central organization </li></ul></ul>
  26. 26. Kiva Fellow Video
  27. 27. Thank you and questions