NSLC 2010Premal ShahPresidentKivawww.kiva.org
Parth ShahNational DirectorKiva High Schoolwww.kivahighschool.org
"Revolutionising how donors and lenders in the US are connecting with small entrepreneurs in developing countries”
What is Microfinance?
• Microfinance = small capital• The poor are typically excluded by financial service providers:
• No collateral• No credit history• Illiteracy
• The poor need financial services, and already use them informally:• Borrowing money from loan sharks with interest rates so highthat 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
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?
2
Microfinance Institutions
• 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
• 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
Microfinance Institutions
Entrepreneurs
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
Traditional Microfinance Lending Process
Why loans rather than charity?
• Dignified Business Transaction• Spreading opportunity, rather than charity• Sustainable
– A Hand-up not a hand-out!– Spreading opportunity rather than spreading
wealth
5
"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." -- Howard Thurman
Guiding personal principle
Sophomore slump
20
“Ali
ve-n
ess”
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 Kiva.org
PayPal acquired by
eBay
Big company – “do I matter?”
angst
“I got this idea”
OMG it’s working!
33Age
InternetLender
Online marketplace
Local Partner(MFI)
Entrepreneur
Money
Information
Kiva 101
550K people lent $120M to 200K entrepreneurs in 4 years
Other Key Stats• Growth: $1M loans every week• Repayment Rate: 97%• Recycle Rate: 65%• MFI Portfolio: 115 MFIs in 50 countries. Growing 3 a month.• Traffic: 40,000 visitors / daily• Organization: 35 employees / 500 volunteers • Leverage: $10 in loans for every $1 donated.
5 yr goal = $1 Billion
Kiva utilizes 4 “Web 2.0” principles
1. Create an “Addictive” User Experience
2. Be “Radically Transparent”
3. “Crowdsource” against constraints
4. Build in “increasing returns on data”
10
Create an “Addictive” User Experience
“Addictive” = Easy + Fun
11
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
How Kiva tries to make it “Fun” Badging, Teams, fast changing UGC, stats...
13
Loans are fully funded in hours
Transactions happen every 18
seconds…
Real time un-edited
updates…
Randomized “1 minute of
fame “ + Lending Teams…
For some, Kiva is becoming very addictive!
14
Be ‘Radically Transparent’
Transparency Authenticity Trust
Kiva and Radical Transparency
Paying for Kiva’s overhead is an explicit choice
Kiva and Radical Transparency
Data inaccuracy and defaults are made explicit
“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?
Build in “Increasing Returns on Data”
Leading public platform + Data integrity
“Increasing Returns on Data”
Public reputation system for MFI Risk and Social Performance
Social Rating
Risk Rating
Kiva Social Rating
Kiva Risk Rating
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
Kiva High School
Mission - to bring together and organize high school students interested in fighting poverty on both a local and national scale.
How does Kiva High School Work?
1.Starter-Kit • What is Kiva/Microfinance/Kiva High School? • How to setup a chapter• Chapter fundraising ideas• Chapter finances
25
Kiva High School
What does Kiva High School bring to your school?
•Awareness of global issues such as poverty
•Give high school students a platform to make a powerful impact
•Show the capacity of microfinance and the ripple effects of your loan
•A network of like-minded students that are unified through a central organization
26
Kiva Fellow Video
http://fellowsblog.kiva.org/2010/03/11/12745/
27
Thank you and questions
Top Related