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Spring2008 icePoverty Block6Group4. Understanding Kiva. - PowerPoint PPT Presentation
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Spring2008icePovertyBlock6Group4
‘I'd love to teach a man to fish.’ In other words, if you give a man a fish, it solves the problem for one day, but if you teach a man to fish, it solves the problem for a lifetime. What we argue at Kiva is that most of the working poor today actually know how to fish. They just need a little seed capital to buy a boat and a net. With that, they could actually start earning income for their families. And then they could start paying for their children's education, paying for their own health expenditures and basically just creating a sustainable livelihood for themselves. So, it's access to credit that's important.- Premal Shah, President of Kiva.org
Understanding Kiva
Lender Entrepreneur
Understanding Kiva
Leveraging partnerships to spread the word
Market Kiva through partnerships with key online advertising and social networking websites
Google, YouTube, Yahoo!, MySpace, Facebook
Kiva spreads mission through networking communities, blogs, word of mouth, and merchandising (Kivapedia, KivaFriends, Oprah)
I think Kiva is a totally unnecessary organization that exists to please the people who are participating and isn't making any real difference.
-Thomas Dichter, former U.N. and World Bank microfinance consultant
Kiva has critics
SWOT Analysis
Strengths Weaknesses•Frees entrepreneurs from monopolies of local money lenders who can charge interest of up to 300%/year•Addresses the most damaging charges against microfinance by allowing MFI’s to lower interest rates… thanks to kiva’s lower cost of capital (2% vs. industry 12%)
•No new job generation… one bank loan vs. a regular paycheck•Borrowers alone better off, not entire countries•Misses the middle•Bias when choosing who to fund
Opportunities Threats•Flood of hype… including media attention and endorsements•Website/business framework easily altered•Target small to medium sized enterprises that attract investors not loaners
•Questions/criticism surrounding all of microfinance
An integrated approach to poverty elimination: Kiva and BRAC Sudan
0 5,000 10,000 15,000 20,000 25,000 30,0000.00%
50.00%
100.00%
150.00%
200.00%
250.00%
Number of active borrowers
Ope
ratio
nal s
elf-s
uffic
ienc
y Kiva partners with smaller MFIs that don’t have access to low-cost capital
• Bubble size indicates gross loan portfolio• Yellow bubble represents median level for all non-Kiva MFIs
Kiva has helped BRAC
12/31/06 6/30/071 year %
Improvement
Gross loan portfolio 471,732 2,332,375 394%Total assets 1,691,867 3,814,465 125%Operational self-sufficiency 21.65% 75.65% 249%Profit margin -361.81% -32.19% -91%
Number of active borrowers 5,808 19,507 236%Average loan balance 81 120 48%
Why is Kiva great for Sudan?
• Bypasses the unreliable Sudanese government
• Helps raise and distribute capital to those who need it most
• Raises awareness
Kiva bypasses an unreliable Sudanese government
Kiva gives the neglected majority access to capital
80%
7%13%
Labor Force31%
36%
33%
Percent of GDP
Kiva raises awareness and connects Sudan with the rest of the world
So what else can you do with $50?
Naomi Mensah's Kiva Website
Spring2008icePovertyBlock6Group4
Questions?