Kiva Presentation for Foothill College Microfinance Club
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Transcript of Kiva Presentation for Foothill College Microfinance Club
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Kiva.orgFoothill Microfinance Club
February 23, 2011Zack Turner
@wzt
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Who am I?
Kiva Fellow in Kenya 2008
Kiva Staff 2008 - 2010
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Who am I?
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Who am I?
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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
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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 =Savings, Insurance, Credit
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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?
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 collateral• No credit history • Illiteracy
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?
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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
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Kiva’s Story
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How Does Kiva Fit in?
Microfinance Institutions
Microfinance Institutions
EntrepreneursEntrepreneurs
Banks and NGOs
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
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Individual lenders and donors
Gifts-in-kind, Commercial Lenders
Government grants
Major Donors, Churches, Foundations, Corporations Provides Capital for MFI
Sources of Funding
How Does Kiva Fit in?
InternetLender
Online marketplaceLocal Partner
(MFI)Entrepreneur
Money
Information
How Kiva works
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“Kiva in a Box”: The Big Picture
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Borrower
MFI
Lender
Kiva
Mutual Value
Why Does Kiva Matter?Value for all Stakeholders:
More Borrowers Receive LoansMFIs have more capitalLenders have easy and effective ways to give
Changing perceptions of the developing world
Breaking the bottleneck of wealth / poverty
Doing this at scale
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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.
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
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Where is Kiva today?
Mexico
GuatemalaHondurasNicaragua
HaitiDominican
Republic
SamoaEcuador
Peru
BoliviaParaguay
Senegal
Sierra Leone Cote
d’Ivoire
Ghana
Togo
Nigeria
Cameroon
DRC
Mozambique
Tanzania
KenyaUganda
South Sudan
Indonesia
VietnamCambodia
NepalPakistan
Afghanistan
Tajikistan
LebanonGaza Iraq
Azerbaijan
Ukraine
MoldovaBosnia
Bulgaria
Kiva has lent over $ 194 million in loans through126 Microfinance Partners in 58 countries and is still growing
United States
Chile
Mongolia
South Africa
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Why Does Kiva Work?
It is about connecting people
Stories
Technology
Viral
Accessible
Press
Crowdsourcing
Transparency & data
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New loan categories
Scale Break Even Innovate
$1 Billion for 2M borrowers
Self-sufficiency at scale
The next 5 years: 3 aspirations
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Interesting FactsKiva is international (lenders from 210 countries)
Equal playing field
High Risk Areas: Iraq, DRC, Palestine
Unique Loan Products
Proliferation of Technology
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1) Make a $25 Loan
1) Give a $25 Kiva Gift Certificate
1) Spread the Word! (email footer, add Kiva to your blog, join Facebook cause, follow Kiva on Twitter)
2) Start a Lending Team (join an existing team, start your own team with family and friends)
Get Involved Today!
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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 TurnerKF5
@wztwww.kiva.org
Loans that Change Lives
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Questions?
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Additional Slides
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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…
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Reach “The Long Tail’
“The Long Tail”
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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)
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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)
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Kiva utilizes five “Web 2.0” principles1. Create an “Addictive” User Experience
2. Be “Radically Transparent”
3. “Crowdsource” against constraints
4. Build in “increasing returns on data”
5. Reach the “Long Tail”