Below is a chart covering three countries in various areas. This chart is for background information to understand the type of situations that many of these developing countries are in. These situations often include abject poverty, poor infrastructure, disease, lack of sanitation, hight levels of illegal activity, lack of the government's ability to help its people and more. It is not meant to be confusing, but to show how despite some of the similarities in these developing countries, they also have differences that are specialized and have specific needs. Kiva's flexibility allows entrepreneurs in each of these countries to best mold their lended resources to their unique situation. This idea will be built upon throughout this article.

The demand for Kiva loans has been so high that some visitors to Kiva.org were greeted with the message: “Thanks Kiva Lenders! You’ve funded EVERY business on the site!!”


They sold out of loans around the holiday season and additionally sold $2 million in Kiva certificates awaiting investment. Kiva as a whole is economically sustainable with its tremendous growth and large user base. They've even sustained their growth within the last year with the innumerable press articles and interviews that have generated such wide exposure. Most of the growth undoubtedly came from Oprah but it continues to grow without any more features on Oprah!


Within our chosen regions, Cambodia has the MFI with most money raised: Credit MFI -- World Relief in Cambodia -- has $1,256,325 in total loans. That isn't their only Kiva partner MFI either--Maxima also works with Kiva and has $288,700 in loans. 31% of Cambodia's GDP comes from agriculture and one of the MFIs specializes in rural lending. Tajikstan has over $1 million in loans over the spread of three MFIs. While past progress is not a sure indicator of future success, Kiva seems to be only growing, gaining exposure and finding new partners. Small loans don't seem like they'll be scarce to obtain in the future and Kiva is already looking into ways to fund their operations -- through transaction fees if donations themselves don't suffice.

The sustainability of the field partners themselves depend on their local business environments. However, new field partners can always apply to work with Kiva so they wouldn't necessarily lose presence in a country due to problems with individual microfinance institutions. The average interest rate that a Kiva field partner charges is about 21%, because it's allegedly difficult to make small loans and they have to cover in the event of a default. Still, the high repayment rate proves that the interest is not unmanageable.







Kiva.org seems to be confident in its cultural sustainability because of its main appeal of drawing human interest into the lives of citizens from less developed countries. In person, people often donate quarters to strange children in poor countries when they see those white cardboard donation stands without second thought. They never hear back from the child or even know where the money goes and that isn't even a deterrent for someone who truly wants to make a monetary difference.


Kiva's improved model
gives the lender INSIGHT
into the lives and businesses of their recipients.


Through pictures and reports, they physically see their morning doing good and they even get the money back! People used to donate without getting anything in return including personal connections.


If viewing pictures and reading business descriptions aren't enough, you can often view interviews of loaners through Kivatv.org which streams videos of personal businesses 24/7. They show a video pertaining to the entrepreneur on the screen and have a donate button conveniently next to it should one become moved to the point of lending. Often it just shows how to use the Kiva interface to lend money and it's not the best quality, but it has great potential. Kiva has celebrity endorsements in Bill Clinton and Oprah, perhaps they can expand on that and unleash the true potential of Kivatv. Nonetheless, it creates a more intimate experience from lender to loaner and that ultimately contributes to the cultural sustainability.







Kiva doesn't have particularly demanding production processes or emit negative externalities so it shouldn't be any less environmentally sustainable than any other banking operation. It requires MFIs to have the means to disburse cash and meet people, have offices, neither of which really harms the environment. Kiva itself, aside from having central location and using lots of electricity to power their computers, isn't particularly damaging to the environment.

The MFIs in Cambodia and Tajikistan mainly fund agricultural businesses but also service and retail sector operations. They're also lacking in negative externalities. They're quite old industries that have been environmentally sustainable for their existence thus far and will probably continue that way.








There are also other organizations that exist for lending money, such as non-governmental or ganizations (NGOs) that promote certain economic activities in developing countries, and also for-profit organizations that provide lending. Organizations like Globefunder.com and Prosper.com can help individuals pay off bills, go back to school, cover medical expenses, make rent payments, and other personal expenses. They do all this by using a strategy of creating a marketplace for lenders and loaners.

The process is like this:
1. The organization can measure a borrower's credit worthiness and assign a grade that lenders can evaluate when they bid for the loan.
2. Lenders can then bid on the amount they're willing to loan and the interest rate they want in return, and if they win the bid at the end of the listing (like ebay, it's a fixed amount of time), they're able to make the loan and wait for repayment.
3. If a payer defaults on payment, credit collectors are involved just as if they defaulted on a bank loan and their credit history is adversely affected. There is a monetary incentive in making for-profit loans but there is a higher default rate dependent on the credit rating.

Another major difference is that organizations like Globefunder and Prosper focus on individuals their own personal financial problems rather than improving the lives of the enterprising poor in developing countries. Kiva is not meant to be financially rewarding--your money depreciates over time so even when you are repaid, you have lost money to inflation and have gained no interest. Further more, it is not even tax deductible since it is a loan and not a donation. For many though, the best payment seems to be the emotional reward of helping others help themselves.






It provided Mok Phaly in Cambodia the means to purchase a sewing machine to support her family. Oam Hoeum (left, 2nd picture) borrowed $700 to purchase a motorcycle and more vegetables to grow her vegetable stand. She's a widow supporting five children since her husband passed away a few years ago. In Tajikistan, Gulchekhra Karimova borrowed $300 to purchase sowing carrier bags for her tailoring business. Written in her profile is, "Gulchekhra has noted that there is a big demand for carrier bags. She has tried to sow and sell the carrier bags made by her. Now she has a lot of clients. She would like to buy material for carrier bags to sell them wholesale." She is also married with three little children and can use the profits to care for them.



The loans are all 100% repaid and now those, such as Gulchekhra who is taking many orders for her bags, are successful in their field. Kiva has changed society by providing poor people with credit lines to expand their business that they wouldn't be able to obtain otherwise so they're able to grow their business and be better financial supporters in their family. I observe that Kiva seems partial to families with children based on the businesses I've seen funded faster but they seem to fund them all on average in about a day anyway. This development has contributed to the growth of small businesses everywhere and the self sufficiency of the entrepreneurs who run it.


For future design, the lending system appears to be sufficient so the focus should shift to marketing. Although Oprah brought a huge following to Kiva, they can next try to market towards college students. A lot of activists in college are always looking for a good cause, and even for a broke college student, losing $25 is really only losing a 30-pack of beer. Jessica Flannery (cofounder of Kiva) realized the untapped capital in "a guy in Kansas right now who probably A) never heard of micro credit or B) read a Newsweek article, has no other option but to make a donation at this point at a price that he would like to." There's untapped capital in students who want to help and don't feel like they can afford to donate a lot to charity, who don't benefit from tax deductions but might benefit emotionally by funding a business venture. Kiva can benefit from finding even more sources of capital in the future. From the way things are going now, their future looks bright just the way it is.