Kiva (organization) facts for kids

Quick facts for kids
Kiva Microfunds

Founded	October 2005 (2005-10)
Focus	Economic development
Location	San Francisco, California, United States
Area served	World-wide
Method	Microcredit
Key people	Premal Shah (co-founder) Jessica Jackley (co-founder) Chris Tsakalakis (CEO)
Revenue (2015)	$19,847,885
Expenses (2015)	$15,915,830
Endowment	$27,389,839
Staff (2015)	117
Volunteers (2015)	450

Kiva Microfunds is a 501(c)(3) non-profit organization headquartered in San Francisco, California. Kiva's mission is "to expand financial access to help underserved communities thrive."

Kiva distributes funds that it receives to microfinance institutions, social impact businesses, schools or non-profit organizations and does not generally directly provide funds to specific individuals. These organizations are charged fees by Kiva and borrowers pay interest on most loans.

Kiva is supported by grants, loans, and donations from its users, corporations, and national institutions. Since 2005, Kiva has crowd-funded more than 1.6 million loans, totaling over $1.68 billion, with a repayment rate of 96.3 percent. Over 2 million lenders worldwide use the Kiva platform. Despite its size, independent review by GiveWell in 2009 failed to find evidence that the organization produces significant social benefit, with at least one partner supposedly vetted by Kiva earning high profits while having a very high recipient drop-out rate.

History

Early Kiva field partners (September 2006)

Kiva was founded in October 2005 by Matt Flannery and Jessica Jackley. The couple's initial interest in microfinance was inspired by a 2003 lecture given by Grameen Bank's Muhammad Yunus at Stanford Business School. Jackley worked at the school and invited Flannery to attend the presentation. Soon after, Jackley began working as a consultant for the nonprofit Village Enterprise, which worked to help start small businesses in East Africa. While Flannery was visiting Jackley in Africa, the two spent time interviewing entrepreneurs about the problems they faced in starting ventures and found the lack of access to start-up capital was a common theme. After returning from Africa, the two began developing their plan for a microfinance project that would grow into Kiva, which means "unity" in Swahili.

In April 2005, Kiva's first seven loans were funded, totaling $3,500, and the original entrepreneurs were subsequently deemed the "Dream Team".

Lending process

Kiva works with more than 300 microfinance institutions, social impact businesses, schools and non-profit organizations around the world, called "Field Partners", that post profiles of qualified local entrepreneurs on the Kiva website. Lenders browse borrower profiles on kiva.org and choose an entrepreneur they wish to fund. The lenders transfer their funds to Kiva through credit card processing or PayPal, which waives its transaction fee in these cases. Lenders can loan money in increments of $25.

After receiving lenders' money, Kiva aggregates loan capital from the individual lenders and transfers it to the appropriate Field Partners, which disburse the loan to the borrower. Kiva does not charge interest on the capital sent to Field Partners, but often Field Partners do charge some level of interest to borrowers to cover administration costs. Interest is typically higher on loans from microfinance institutions in developing countries than interest rates on larger loans in developed countries because of the administrative costs of overseeing many tiny loans, and the increased risk. As the entrepreneurs repay their loans with interest, the Field Partners remit funds back to Kiva. As the loan is repaid, the Kiva lenders can withdraw their principal or re-lend it to another entrepreneur.

Finances

As of March 15, 2016, Kiva had distributed $827,356,850 in loans from 1,394,336 lenders to 1,928,760 borrowers, and a total of 1,036,558 loans had been funded through Kiva. The average loan size is $411.26, and the average Kiva user has made 10.17 loans. Kiva's current repayment rate for all its partners is 97.1%.

For the fiscal year 2012, Kiva made $15,632,786 in total revenue and had $12,482,528 in total expenses, leaving $3,150,258 to invest. The organization's net assets in 2012 totaled $16,248,638. Kiva itself does not charge interest on its loans; they supply capital to microfinancing institutions for free. These microfinancing institutions then lend out money with high interest compared to bank finance in mature markets, averaging a portfolio yield of over 30%. The organization's main sources of funding are grants, financial backing, and discounted services from many major national corporations and institutions. Chevron Corporation, Visa Inc., and Skoll Foundation awarded Kiva a two-year $1 million grant, $1.5 million grant, and $1 million grant respectively. Kiva also won a $1 million grant in Sam's Club's "Giving Made Simple" campaign and $500,000 in American Express's "Take Part" competition. Additionally, Omidyar Network awarded Kiva a $5 million grant over five years to help Kiva expand its field partners and support due diligence.

Management

In 2023, according to their 990 tax form, Kiva CEO Neville Crawley's salary was $424,238. Their total revenue in 2023 was $34.7M. The non-profit had thirteen staff members with salaries ranging from $200,000 to over $400,000 that year. Kiva began paying interns in 2019.

Areas of work and loan use

Female-owned businesses

As of October 2017, 81% of Kiva's loans have been made to women.

In their non-fiction book Half the Sky, Nicholas D. Kristof and Sheryl WuDunn highlight Kiva's work along with that of some field partner organizations, such as the Kashf Foundation in Pakistan. Kristof and WuDunn noted the risky nature of microloans as a path out of poverty, but endorsed Kiva and similar microfinance efforts, writing that "microfinance has done more to bolster the status of women, and to protect them from abuse, than any laws could accomplish."

Green loans

In 2011 Kiva added a new category of loans to help borrowers move to cleaner and safer forms of energy, green agriculture, transport and recycling. Green Kiva loans help fund solar panels, organic fertilizers, high-efficiency stoves, drip irrigation systems, and biofuels. As of December 2013, Kiva lenders had crowd-funded 4,600 green loans.

Support for higher education

In 2010, Kiva began a Student Microloans program that allowed lenders to help support students seeking access to higher education. Student loans are funded with the same crowd-funding approach, and typically students have 1–3 years to pay back their loans.

In 2014, the education offerings on Kiva expanded greatly when the organization began a deeper partnership with Vittana. Vittana works on the ground in countries in Asia, Africa and Latin America, developing loan alternatives for low-income students. Through the partnership, all loans sourced by Vittana now appear on Kiva for funding.

Medical loans

Some Kiva field partners, such as Alivio Capital, specialize in funding medical loans. Others may fund medical loans as well as other loans. A development scholar in Ghana has suggested that microfinance medical loans can be an effective way to close the gap in medical care access in developing countries.

Support for refugees

In July 2017, Kiva launched a World Refugee Fund, a $250,000 matching fund to provide support to refugees and host communities in countries including Lebanon, Jordan, and Turkey. As refugees repay the loans, they build a track record in their new locations. The fund is to be followed by a rotating fund of up to $9M in loan capital.

Other Kiva programs

Kiva U.S.

In 2011, Kiva launched Kiva U.S., a 0% interest peer-to-peer lending pilot program for entrepreneurs in the United States, as part of efforts to "cut lending costs through technology". The loans posted to Kiva U.S. are often from borrowers who have been rejected for loans by traditional banking institutions, but on Kiva U.S. they do not need to be able to produce high credit scores or collateral. Kiva U.S. uses a system of trustees, who vouch for the borrowers. Kiva U.S. trustees can be local non-profits, service organizations, businesses, faith organizations or community leaders.

The average loan size for US borrowers is $5,000. US borrowers average about two years to repay loans.

Kiva Labs

Google awarded a $3 million Global Impact Award to Kiva in 2013 to fund the Kiva Labs project, which looks for ways to increase the flexibility and impact of microfinance. Labs initiatives include lowering interest rates, providing more flexible repayment terms that accommodate issues like seasonal profits in farming, and offering longer-term loans for investments like education. Labs also focuses on providing access to clean energy technology and using mobile technology in ways that will bridge the knowledge gap. At the time of the lab's launch, Kiva lenders had crowdfunded "132,000 agricultural loans; 4,600 green loans, and 670 mobile tech loans."

Kiva City

Kiva City provides local business owners and entrepreneurs in U.S. cities with the opportunity to crowdsource loans. It was launched by Kiva and former US President Bill Clinton at the Clinton Global Initiative America conference in Chicago in 2011. Kiva City locations include: Detroit, New Orleans, Los Angeles, Washington D.C., Newark, Richmond, Little Rock, Pittsburgh, Philadelphia, Milwaukee, Louisville, San Francisco, New York City, and Oakland.

In less than a year, the Kiva City programs in Richmond, Virginia, helped fund more than $100,000 in loans to local businesses.

Promotions and marketing strategies

In March 2012, Reid Hoffman, LinkedIn's co-founder, lent Kiva $1 million. Kiva then allowed 40,000 people to lend $25 for "free". Lenders still choose a borrower, but the borrower will pay back Hoffman instead of the lender who chose them. Kiva hopes that the "free" users will lend to more of their projects, and thus increase their overall user base.

In his 2007 book Giving: How Each of Us Can Change the World, Bill Clinton covers Kiva.org and the work the organization is currently doing and has done in the past.

External reviews

The following independent entities have reviewed Kiva.

• On October 1, 2019, charity evaluator Charity Navigator downgraded Kiva from 4 (out of 4) to 3 stars, but by 2020 it was rated 4 stars again. Kiva has been top-rated at 4 stars since 2010 (with the exception of 2018 through mid-2019).
• In 2013, foundation Google.org conducted extensive due diligence on Kiva and awarded it a $3 million Global Impact Award for the creation of Kiva Labs.
• In 2012, charity evaluator Philanthropedia awarded Kiva its Top Non-Profit Award based on topic area expert opinions.
• In 2011, The Economist honored Kiva with its Innovation Award.
• In 2010, foundation Omidyar Network conducted extensive due diligence and awarded Kiva a $5 million grant to scale its impact.
• In 2010, Kiva was selected as one of Oprah's Ultimate Favorite Things.
• In 2009, charity evaluator GiveWell published a generic critique of giving marketplaces including Kiva and Global Giving, and specific critiques of Kiva.
• In 2008, TIME magazine named Kiva a Top 50 website.
• In 2007, Skoll Foundation conducted extensive due diligence and awarded Kiva a $1 million grant as part of its recognition of the world's best social enterprises.

See also

In Spanish: Kiva (organización) para niños