World Vision recently launched their own Kive-like lending platform named Micro. They are the latest microfinance lending platform to launch, joining more established players such as Kiva, Wokai, and Microplace. It looks like the site was launched in September (also on UrbanMinistry), but I was made aware of the site from SocialEarth’s blog post today. According to their site, World Vision has disbursed 3,500,000 loans totaling more than $1.8 billion since 1993, has 604,000 active entrepreneurs, and loaned $396 million last year — so they are not new to microfinance by any means. Loan sizes range from $25 all the way up to $500+. Currently, Micro only offers loans for entrepreneurs in Rwanda, Mexico, and the Phillipines — but I’d guess they will be adding new markets in the coming year.

I’m certainly a fan of anything that brings microfinance into the spotlight and am thrilled that World Vision is tapping their existing donors to help raise capital for microfinance, but am yet to be convinced software development time and effort should continue to be spent on building technology to power lending platforms. As I said in August, I’d still like to see Kiva.org open source, or white-label, some of their software to other players in the market who want to specialize in a particular geographic area or type of business; that would enable development time and dollars to be spent building features on top of some of the great P2P lending technology that already exists.

For those interested in following Micro’s progress, you can follow them on Twitter here. Head over to SocialEarth for more details.

Casey Wilson recently had a great email that she sent out about the recent articles about Kiva in the NY times that I thought was worth posting:

You might have read Stephanie Strom’s article “Confusion Where Money Lent via Kiva Goes” in the New York Times a few days ago.  This issue has been making the rounds since David Roodman’s post a month ago.  As a fellow “peer-to-peer” microfinance organization, we thought it was important for us to follow up with our own supporters on this issue.

To be clear, contributions on Wokai go to microfinance institutions (our “Field Partners”) in rural China, who are in charge of distributing the loans to the borrowers and collecting repayment.  A borrower can in fact receive a loan from a Field Partner prior the time the loan is “100% funded” on the Wokai website.  Below are two excerpts from Wokai’s FAQ that might shed more light on the issue.

Can a recipient’s loan start before it is 100% funded?

Yes. Once a Field Partner has posted a recipient’s profile online, Wokai Field Partners can use their own capital to issue that recipient’s loan. Wokai then reimburses this capital to the Field Partner once the recipient’s loan has been 100% funded. If the recipient’s loan is canceled for any reason, the recipient will no longer be designated as a “Wokai recipient” and that Field Partner will permanently fund the loan with its own capital reserves.

What happens if a recipient’s loan does not get 100% funded by the final fundraising day?

If a recipient’s loan is not 100% funded by the time it reaches zero “Days Left”, then Wokai will either extend the recipient’s fundraising period by one month or, if there is any specific reason why contributors are choosing not to fund the recipient, Wokai will cancel the recipient and allow contributors to select a new recipient to support.

Wokai is committed to being transparent in its processes.  To that end, we discuss our field partner relationships right on our “About” pages.  We even received credit from David Roodman in his original post for being very open about our relationships with field partners.

To read more about what Wokai does, visit their site at Wokai.org

Back in November last year I wrote about a new lending organization called United Prosperity that has a new take on microfinance lending.  United Prosperity recently launched the full version of their website, which allows its lenders to guarantee loans for entrepreneurs rather than loan money to directly the the entrepreneurs.
Here’s some more information about United Prosperity:

United Prosperity is a non-profit organization that helps you combat extreme global poverty powerfully by multiplying the impact of your money through loan guarantees. We are the world’s first person to person loan guaranteeing website.  You can become a compassionate social guarantor with United Prosperity by providing an interest-free cash collateral or guarantee for an entrepreneur on our website. No minimum amount is required, and you are able to choose which entrepreneurs you would like to support.

The biggest question that I had when I was surfing the site was why should I choose United Prosperity over other sites?  Of course, a few minutes later, I found my answer.  Here are some good examples of how United Prosperity is different:

Example A: Providing a loan to a poor entrepreneur: A poor entrepreneur needs a $1,000 loan. Ten lenders could each contribute $100 to make a loan of $1000 to the poor entrepreneur.Thus a total $1000 in contributions results in $1000 of loans made to the poor entrepreneur. On an individual basis, a $100 contribution results in a $100 loan to a poor entrepreneur.

Example B: Providing a loan guarantee to a poor entrepreneur through United Prosperity: Guarantee amounts are typically only a portion of the loan amount. For example, for a bank to lend $1000 to a poor entrepreneur, it might require a guarantee of only $200. Thus 2 social guarantors could each contribute only $100 and cover the $200 guarantee needed and thereby make a $1,000 loan available to the poor entrepreneur.Thus $200 in guarantees results in $1000 loans available to the poor entrepreneur. On an individual basis, $100 loan guarantee results in $500 of lending to a poor entrepreneur.

We maximize the impact of your dollar:
For every $1 you put toward a guarantee, you will allow nearly $2 or more in microloan to the entrepreneur from local banks either directly or through our partners. Better yet, you will be able to track your chosen entrepreneur’s progress, and when they repay their loan, you will be repaid in full! At that point you will have the opportunity to support another entrepreneur if you wish.

Although the website has a lot of information, it is easy to navigate.  United Prosperity does a really good job explaining what the benefits and risks of microfinance are but still manages to have the human touch, rather than just being a website full of information.  They have a team blog were members of the organization write updates, as well as a great community page which allows lenders (and even non-lenders) to share insight about the platform as well as microfinance in general.

I just made my first loan of $25, does anybody want to match me

Anybody and everybody who has used the internet has most likely used Craigslist at some point or another.  Founded by Craig Newmark, Craigslist is a network of online communities, including sections that cover jobs, personals, housing, forums, services, and classifieds.  This week, Craig Newmark has officially announced that he is joining the Advisory Board for LendForPeace.org . Craig has alway been a supporter of peace initiatives in the Middle East, and with his experience as being one of the pioneers of community building, he should be a great asset to LendForPeace.org and can hopefully create some great microfinance initiatives in the Middle East and within the microfinance community.
Read the entire press release here.

Congrats to the team at Wokai for landing this CNBC spot!

Nick Macky at Grubby Lens recently posted a video about Wokai.org that came from shooting footage with Casey Wilson (Wokai CEO). I’d recommend watching it for those interested in learning more about the background of Wokai.

Facebook for Farmers from grubbylens on Vimeo.

The microfinance lending platform LenderForPeace.org recently made news on FOX Business.  Here’s a clip of the story:

Microfinance lending platforms are part of a new wave of innovative websites that help connect people like you and me with entrepreneurs around the world.  I’m sure it’s no secret which platform I prefer, however, I like to give each up and coming platform a fair trial, so I always like to highlight any new platforms so that people can make their own decision.
Last week, LendForPeace.org was officially launched by four students from the Wharton School of Business at the University of Pennsylvania.  Here’s a few words from the founders themselves:

“Using our site, you can make a loan directly to a vetted micro-entrepreneur in the West Bank.  We work with US government-approved microfinance institutions on the ground to deliver your capital along with training and guidance to low-income individuals who are interested in starting or expanding their own small businesses.  Your loan is repaid over a set period of time as your micro-entrepreneur builds economic self-sufficiency and a stake in peace.
Founded by two Jews and two Palestinians, LendforPeace.org (”LFP”) was created to enable people of all faiths and backgrounds to make a tangible difference in the Israeli-Palestinian conflict.  To learn more about our mission, read a Message from the Founders.”

LendForPeace is a pretty straight forward lending platform that gets right to the point, and doesn’t require a lot of hoops to jump through.  For people that are newer to microfinance lending, this is a huge plus because they won’t be distracted from what they are trying to do.  I am also a huge fan of microfinance platforms that focus on certain geographic regions.  Similar to Wokai’s bold move in China, LendForPeace focuses primarily in the Palestinian territories, which as we all know in quite the hotspot.
Ryan Hogarth, from Microcapital.org, goes into depth about LendForPeace in his article “MICROCAPITAL STORY: A Kiva-like Internet Microfinance Brokerage “Lend-for-Peace” is Founded for Palestine.”

At first glance, LendForPeace.org seems very promising.  I am excited to make my first loan and to see what kind of impact it can have.  If anybody has any feedback or would like to share an experience with LendForPeace.org, feel free to let us all know.

Learn more microfinance lending platforms.

I was reading a good article on livemint.com called “Big Microfinance Firms Taking Over Clients of Smaller Players,” and in it Vikram Akula, the founder and CEO of SKS Microfinance, discusses how smaller MFIs are having a hard time getting funding, so SKS is helping out a lot of their recipients:

“Banks are lending only to large MFIs. We are in a strong position. We are holding discussions with MFIs who are facing strain and helping them by taking over their clients,”

Since there are so many small MFIs out there who are having trouble finding funding, why do MFIs run out of people to loan to?  It has happened multiple times that I have gone to microfinance lending platforms and have not been able to loan money.  If these small MFIs in India are having trouble getting money for their recipients, why don’t they reach out to these organizations?  The article also mentions that there is a demand for 55 billion dollars while India currently only provides about 5 billion in microfinance loans.  If the people are out there, wouldn’t it just be a matter of connecting them to the right organizations?  It seems like there are plenty of lenders ready to donate to individual recipients, but not so many who are willing to donate to MFIs. What if there was a microfinance lending platform that was similar to Kiva and Microplace, but instead of donating money to individual recipients, you could donate to different MFIs?  Lenders could give loans to MFIs, who would in turn give loans to entrepreneurs.  The loans would have to be for a longer term than normal since they would most likely be bigger loans.  The model could be either non-profit or provide a return, depending on the business model, and it could help smaller MFIs who are having a harder time coping with the current economic crisis.  Of course there would be pros and cons to lending platform, but I think that if they were weighed out, the pros would win.

Learn more microfinance lending platforms.

Ever since we have launched mykro.org, I have had a lot of people who were interested in hearing about different lending platforms that are similar to Kiva.  There are a lot of lending platform that give the lender a return on their loan, but I have found very few where you can just lend money to people in need without getting a return.  I recently came across a company that has a great new concept.  United Prosperity, which is set to launch soon, is a person to person loan guaranteeing website.  Rather than providing funding for the full loan of an entrepreneur, the lender only pays enough for the collateral, that way the recipient can get a full loan from a bank or other financial center.  For more information about United Prosperity, take a look at their website, and watch for the launch of their beta version shortly.