how kiva works odws aug10

How Kiva Works

Kiva Fellows TrainingAugust 2010 JD Bergeron

Problem Statement & Solution: Hand up, not a hand out

Supplies for a store

Seed for crops

Tools for carpentry

Cloth for weaving

Materials for making products

Millions of people around the world could help themselves if they just had access to money for starting or expanding their small business.

Whether they need tools, seed, fertilizer, cloth, store supplies, it just takes that first step, that start-up capital, to give them a chance to be truly self-sufficient.

However they cannot apply for a loan from a bank, credit company or credit co-operative because banks typically do not serve the poor.

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

The Kiva Microfinance Lending Process

Microfinance Institutions

Microfinance Institutions

EntrepreneursEntrepreneurs

LendersLenders

Kiva Fellows are an adaptable, scalable and sustainable resource to innovate at Kiva and fulfill the mission. Kiva Fellows play an integral role in the Kiva process as they strengthen the P2P connection, ensure data integrity, and increase transparency.

Where we started: 2005 in Tororo Uganda

Entrepreneurs 50 entrepreneurs

Lenders 500

MFIs None

Risk 0% default rate

Early Processes Did Not Scale

US

D

Cumulative loan volumeEntrepreneurs

210,000 loans to 394,000+

Lenders472,000+(742,000 users)

MFIs 119 MFIs in 53 countries

Risk < 2% default rate

Average Loan Size $385.07

2006$2m2006$2m

2007$18m2007$18m

2008$36m2008$36m

Nov 2009$100M

Nov 2009$100M

Where we are today: $152M through 119 MFIs

Processes Have Changed to Facilitate Growth

Kiva wants to be P2P

How Can We Increase our P2P Connection?

Risk Transfer & P2P

In the Past . . .

Beginning in 2010 . . .

Other ways to increase P2P

Ingredient 2010 2011 2012 2013 2014 2015

Profile 100% 100% 100% 100% 100% 100%

Consent 50% 70% 90% 95% 95% 95%

Risk Transfer 10% 30% 50% 70% 80% 85%

Updates 35% 50% 60% 70% 75% 75%

Post-Disbursal 5% 5% 5% 5% 5% 5%

40% 51% 61% 68% 71% 73%

Questions?