In Bed with the Enemy? Kiva and the Chevron Grant

100% of the money Kiva lenders loan goes to the borrowers via the MFIs. Kiva funds it’s operations by donations and grants. The list of corporate partners supporting Kiva is long and growing.

When Kiva announced that they received a 0.5 million US$ one-year grant from Chevron to assist with operational needs across the organization on the one hand that means that Kiva can continue to grow and pursue it’s vision.

On the other hand it did raise concerns with some lenders given the reputation of Chevron. The company is criticized of negligence of environmental risks on multiple accounts (example, example2 or see links in Wikipedia article). Many of the incidents occurred in countries where Kiva is now trying to help.

It’ easy to see why Chevron chose to assist the Kiva cause – it could improve their tarnished reputation and Kiva has a high visibility.

The issue is more on the Kiva side. Why did Kiva accept this grant from a very controversial sponsor? As hard as it must be to keep an organisation running solely on grants and donations – does the end always justify the means?

I am a fan of Kiva but I do have large doubts whether it was the right decision to accept this grant.

One lender in this discussion thread put it this way:

An organization that has human rights issues, donating to a group trying to empower humans.  Isn’t there something wrong with this picture?  What, is Chevron trying not to have nightmares when they put their head on their pillow at night, and Kiva is supposed to make them feel better maybe?  A good name for this partnership might be ‘sleeping with the enemy’ . . .

Kiva Loans Surpass 100,000,000 USD

Congratulations to Kiva. They have tackled another impressive milestone: more then 100 million US$ total loans funded since inception. And the growth curve is pointing straight upwards. 60 million US$ were funded in the last 12 months.

Quoting today’s numbers from Kiva’s statistics page:

Total value of all loans made through Kiva: $100,223,910
Number of Kiva Lenders: 585,070
Number of countries represented by Kiva Lenders: 185
Number of entrepreneurs that have received a loan through Kiva: 249,619
Number of loans that have been funded through Kiva: 142,801
Percentage of Kiva loans which have been made to women entrepreneurs: 82.72%
Number of Kiva Field Partners (microfinance institutions Kiva partners with): 106
Number of countries Kiva Field Partners are located in: 49
Current repayment rate (all partners): 97.88%
Average loan size (This is the average amount loaned to an individual Kiva Entrepreneur. Some loans – group loans – are divided between a group of borrowers.): $404.87
Average total amount loaned per Kiva Lender (includes reloaned funds): $171.34
Average number of loans per Kiva Lender: 4.91

Will Kiva run out of goals now? Definitly not:

But we believe this is only the beginning . . .

Kiva is about dreaming big. The entrepreneurs on the website dream about big business; our Field Partners dream about financially including all of the poor; Kiva Lenders dream about ending poverty.

Kiva was a big dream before the idea of lending to someone on the other side of the world became a reality. Now we have big dreams about making Kiva the world’s hub for alleviating poverty.

This is a quote from a Kiva blogpost from October, which also give the strategic goals for the next 5 years:

  1. Raise 1,000 million US$ in loans over the internet
  2. Reach 2 million entrepreneurs around the world
  3. Realize our own self-sufficiency in the process.

Kiva has my support. Let me know, if I can do anything to win your support for Kiva.

Topics on the Kiva Conference Call

Today was another conference call by Kiva with its lenders.

Kiva informed about the situation of Fundación San Miguel Arcángel (FSMA), a field partner in the Dominican Republic, who is unable to repay lenders and will soon cease operations.

On the question, why Kiva does provide fewer translations, Kiva explained that they have a hard time to find enough volunteers to translate all texts. Another factor is the limited availability of engineering time to improve features related to translation.

Kiva decided in August to not provide translations to English for some loans. In this “non-translation experiment” Kiva will try to measure the effect of omitting the translation on the funding rate and speed.

In the discussion on the currency risk Kiva asked for feedback from the lenders on which information should be presented. One suggestion was to make the information that a currency risk may occur more eye-catching in the loan selection. Consensus was that currency risk information is more important for “power” lenders than occasional, infrequent lenders.

One third of the time of the engineers is spend on MFI and volunteer related issues. One third is spent on lender related (interface, features) issues. One third is spend on maintenance, bug-fixing, system issues.

Conversion rate: Of 100 people visiting the website, 8 make a loan.
40 percent of the people who put something (loans) in the basket, do not complete the check-out.

Kiva Enacts Currency Risk Changes

Kiva has now enacted changes in how currency risks are accounted for. The model was first proposed in March.
Now MFIs can choose “currency risk protection” for their new loans. If this option is selected lenders will have to cover any losses that arise from a devaluation of the local currency exceeding 20% (for the part that is over the 20%).

On listed loans at Kiva there will be a new information status on the “about the Loan” Section under “Currency Exchange Loss”. The status will either be:

  • “Covered”: Meaning the MFI covers any losses (like it has been in the past)
  • “Possible”: The MFI has opted for the new rule – the lender covers currency losses above 20%

I browsed some new loan listings today – most are still offered under the “covered” rule, one example of a loan under the new “possible” rule is this Tajikistan loan. Continue reading

Kiva to Launch Loans to US Borrowers

Tomorrow Kiva will announce that it will start to fund loans to borrowers in the United States. Kiva, which so far lets anyone support loans to small entrepreneurs in developing countries, is reacting to lender suggestions who wanted to use Kiva to help borrowers in need in the US.

In the US Kiva will partner with Accion USA and Opportunity Fund to select eligible borrowers. Initially the small business owners borrowing will be from the areas of Atlanta, Boston, Miami, New York and San Francisco. Continue reading

Kiva Loan Matching Plans

I am blogging this live while listening to the Kiva conference call. Kiva plans a loan matching program, where lenders and institutions can opt to automatically match loans made by other lenders.

Some statements/explanations from the conference call:

  • Today 6 or 7 people out of 100 that visit the Kiva website actually make a loan (conversion rate)
  • Lenders can select to match any loan, or select loans by criteria
  • Lenders can opt to match immediately or only if they have periods of inactivity
  • Minimum account balance allows to reserve some money in the account (only balance over this minimum is used for matching)
  • Donations to the Kiva organisation are mandatory(!) when using the matching feature

Kiva says the new feature allows to automate the lending process and hopes that it inspires others to lend more.

The matching program will probably be launched in summer 2009.

On terms of automation there are similarities to the autobid feature MYC4 has.

See the following presentation for more details on the plans.

Matching Presentation Con Call April 2009

On other issues, there was the message that chances are good, that the Ebony Foundation (a MFI) repays outstanding loans (approx. 40,000 US$).