Kiva hits $1B in crowdfunded loans


On Monday, Kiva, the platform dedicated to social lending for social good, surpassed $1 billion in loans on its online platform. More than 1.6 million donors lending $25 dollars at a time have helped 2.4 million people launch and expand their businesses, complete their education or pursue other opportunities for themselves and their communities. As the San Francisco-based nonprofit organization looks toward the next billion, it is evolving in a few key ways, framing its work as funding the next generation of entrepreneurs.

“Kiva started with a simple idea, to provide people with an easy and transparent way to support the people, places and causes they believe in,” said Premal Shah, president and co-founder of Kiva, in a release provided to Devex yesterday. “As we surpass $1 billion in loan support, we are looking at how to push open doors of economic opportunity in new ways.”

As NGOs and social enterprises are seeking innovative financing solutions, crowdfunding is increasingly becoming a viable tool, and will likely become even more relevant in the near future. A video interview with Premal Shah, president of Kiva.

When Kiva launched in 2006, it was the first crowdfunding platform for social good, and it remains the largest. But while it started as a microfinance website, new initiatives — including the Women’s Entrepreneurship Fund launched last year and the World Refugee Fund launched just last week — demonstrate how the organization is moving toward a new model of what Shah calls crowdfunding meets impact investing. Individuals and organizations alike are represented on the Kiva platform, such as Sikubora Limited, which is installing solar systems for homes, clinics, schools and businesses in Tanzania.

“By telling your story online on crowdfunding platforms, whether it’s Kiva or GlobalGiving or Indiegogo, the hope is that we can make it more efficient to connect these amazing organizations on the frontline with people who want to help find solutions,” Shah told Devex in a past interview.

He said he expects that momentum for crowdfunding will only increase as people continue to look for a more personal way to donate or invest their money and find platforms that offer them feedback loops.

Through online lending, Kiva is demonstrating how crowdfunding can play a role in alleviating poverty and financing progress toward the Sustainable Development Goals. Its impact is particularly clear in areas such as the refugee crisis, climate change and gender inequality, according to numbers included in its $1 billion announcement. Kiva has disbursed loans to 2,013,194 women borrowers, 19,082 to borrowers in green and clean energy, and 4,544 to refugee borrowers.

Kiva is expanding to support social enterprises addressing sustainable development issues, which Shah discussed with Devex onstage at the 2017 Skoll World Forum.

Social entrepreneurs and the public sector have a complicated relationship: they want to work together, but sometimes-radical culture differences keep them apart. Reporter Catherine Cheney and Kiva President Premal Shah explore how to build networks of trust at The Skoll Foundation World Forum.

Posted by Devex on Friday, April 7, 2017

Premal Shah speaks with Devex at the Skoll World Forum in Oxford in April.

Kiva sees its platform, and crowdfunding more broadly, as part of the solution for the missing middle — the gap entrepreneurs face when they outgrow grant capital but are not seen as investment ready and are unable to attract commercial capital.

“A 20 percent loss rate for an impact investor is terrible,” Shah told Devex in April. “But for the average person on the internet, that’s an overperforming donation because they basically got 80 cents on their dollar back.”

With the right funding, however, such locally driven social enterprises can grow into organizations that have broad impact and, eventually, become the type of sustainable business that would attract its own outside investors.

Source: Kiva hits $1B in crowdfunded loans

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2017-07-10T14:46:37+00:00