Online Giving Marketplaces Kiva Presentation

Applying ‘Web 2.0’ principles to Microfinance Online Giving Marketplace Conference Premal Shah President Kiva www.kiva.org "Revolutionising how donors and lenders in the US are connecting with small entrepreneurs in developing countries”

Kiva 101 Internet Lender Online marketplace Local Partner (MFI) Entrepreneur Money Information

+340,000 social investors have lent + $45 million in first 3 years. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],5 yr goal = $1 Billion

Kiva utilizes 5 “Web 2.0” principles ,[object Object],[object Object],[object Object],[object Object],[object Object]

Create an “Addictive” User Experience ,[object Object]

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

How Kiva tries to make it “Fun” Rich user generated content, changing fast... Loans are fully funded in hours (MFI staff love this)… Transactions happen every 37 seconds… Real time un-edited progress updates from around the world… ‘ Popular’ entrepreneurs rapidly rise to the top… Randomized “1 minute of fame “ for Lenders…

Results: +270,000 lenders from +70 countries in 2.5 years… How Kiva tries to make it “Fun” My Page, My Portfolio… “ My Page” encourages self expression, evangelism and loyalty… “ My Portfolio” concept encourages further lending, risk diversification and inter-lender competition…

For some, Kiva is becoming very addictive! KivaFriends.org – unofficial Kiva community forum (built by our users) Several results when searching for the word: “ Addicted ” 

Be ‘Radically Transparent’ Transparency  Authenticity  Trust

Kiva and Radical Transparency Paying for Kiva’s overhead is an explicit choice Results: 7 out of 10 users pay an additional 10% to cover Kiva’s cost. Kiva reached 70% self-sufficiency in year 2.

Kiva and Radical Transparency Data inaccuracy and defaults are made explicit Results: 3% delinquency rate. 3% refund rate. <1% default rate. TBD inaccuracy rate

“ Crowdsource” against constraints Big constraint? + No resources? = Crowdsource

Kiva and “Crowdsourcing” Kiva Fellows Program How do we train MFIs, gather progress updates and verify data accuracy hyper-fast?

Kiva and “Crowdsourcing” Kiva Translator Program How do we immediately translate entrepreneur profiles from native language to English?

Kiva and “Crowdsourcing” We have little money, but great partners! Free payment processing and employee support 120 Million free banner impressions Free Google Adwords – 25% of traffic Free Yahoo Search Marketing and employee support Free promotion (Community Impact Award) Funding for Field Research and Development Free phones for cell based data upload pilot Free promotion of Kiva widget to bloggers Free computers and early funder

Build in “Increasing Returns on Data” Leading public platform + Data integrity  “ Increasing Returns on Data”

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’ Tier I (e.g. Grameen Bank) ----- Tier IV (e.g. church congregation) Current distribution of funds in microfinance The Internet is a promising way to reduce costs and distribute risk in investing in smaller (Tier II - Tier IV) Microfinance Institutions. Could Kiva help discover and scale the next Grameen Bank? ,[object Object],[object Object],[object Object],[object Object]

Online Giving Marketplaces Kiva Presentation

3 Key “Actionable” Takeaways # Web 2.0 Principle Actionable Takeaway 1 “ Addictive” user experience ,[object Object],[object Object],[object Object],[object Object],[object Object],2 “ Radical Transparency” ,[object Object],[object Object],3 “ Crowdsource” against constraints ,[object Object],[object Object],[object Object]

Kiva’s Risk Model helps manage risk on Kiva’s platform and creates an incentive for MFIs to improve transparency and performance. Inputs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Outputs 1. MFI Reputation on Kiva’s site 2. Monthly Fundraising Limit 3. Kiva Audit Prioritization Kiva Risk Model

Online Giving Marketplaces Kiva Presentation

Online Giving Marketplaces Kiva Presentation

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