On June 10th Kiva announced that it will open its loans to US based field partners ACCION USA and Opportunity Fund.  The response was pretty overwhelming.  Most people took either one side or the other, both for and against.  Kiva immediatley took action to get more and more feedback from its readers, including:

  • Dissecting emails they received by their customer service team, at contactus@kiva.org
  • Initiated an online poll that asked “Do you support Kiva’s decision to allow loan requests from the U.S.?”
  • Read users comments posted to the letter posted on this blog on June 19
  • Monitored messages posted to Lending Team message boards (Here’s a look at some of the notes for the Seattle Group)
  • Monitored discussions hosted on KivaFriends.org
  • They hosted a Community Conference Call on July 15th in which lenders were invited to give their feedback on the U.S. pilot

Here is a summary to their response to the main criticisms after Kiva collected data from it’s supporters:

Through the previously mentioned feedback channels, we have monitored the questions and criticisms that have been raised by the Kiva community. There are a number of themes that recurred throughout. We’d like to address the major themes of these criticisms here:

1 – “Loans to the developed world do not serve Kiva’s mission.”

There have been a number of criticisms of Kiva’s U.S. launch that fall within this theme. They include “U.S. borrowers are not poor”, “Kiva has strayed from its mission”, and “Loans to the developed world do not fight poverty.” The themes that connect these criticisms together are:
1. Definition of poverty: how poor is “poor”?, does poverty exist in the developed world?
2. Definition of Kiva’s social mission: do developed world loans contribute towards Kiva’s social mission, or do they detract from it?

We believe poverty is relative. There are many definitions of poverty that exist. One very common global definition is those who live on less than $1 a day. Many countries measure income to create their own “poverty line”, below which those living in that country are considered “poor”. The United Nations Development Program uses a Human Poverty Index that considers life expectancy, literacy, unemployment and income level. Others believe that poverty is something more abstract.

We believe there is no exclusive definition of poverty that defines who is poor and who is not poor. We respect that there are many different opinions of what it means to be poor, and we respect an individual’s interpretation of poverty that is most meaningful to them. We also believe that, within any poverty definition, one might further distinguish moderate poverty from extreme poverty, and we respect that there are many different ways an individual may understand the various levels of poverty that may exist.

We believe there are many factors that contribute to poverty. These can include access to credit, access to employment, access to education, access to health services, and access to food and clean water. As there are many contributing factors to poverty, there are also many solutions to poverty, none of which can eradicate poverty alone.

We also believe poverty is an impermanent state. We believe that it is possible for an individual to move out of poverty, as well as to fall into poverty, according to circumstances that take place.

As such, Kiva does not define poverty for each individual entrepreneur on the Kiva website. Instead, we strive to provide an environment where people can choose who to support based on their own definition of poverty.

2 – “Loans to the developed world dilute Kiva’s brand.”

Kiva’s brand has been built on the concept of individual loans, to individual people, for poverty alleviation.

The first loans on the Kiva website were to entrepreneurs in East Africa. Over time, Kiva added Field Partners in different regions of the world, such as Asia, Eastern Europe and the Americas, and loans to entrepreneurs from these regions were funded on the Kiva website.

We have always considered Kiva to be a global organization, and, as such, we consider our brand a global one. We have celebrated each new country added to our global portfolio, as we have Kiva Lenders who have joined the Kiva community from new countries around the world.

While we recognize that early perceptions of Kiva may have been that our intention was to stay within one region of the world, defined by geography or development, this was never a part of our vision for the organization.

We believe that the addition of the United States to Kiva’s global portfolio does not dilute our brand, but strengthens it, as it emphasizes the global nature of the Kiva platform, reaching across nations, continents, and economies. We recognize that the addition of the United States to Kiva’s global portfolio may be the first time many in the Kiva community have been exposed to this idea.

3 – “Loans to the developed world take money from the developing world.”

Many Kiva Lenders have expressed concern that the addition of developed world entrepreneurs to the Kiva website would negatively impact the amount of money loaned to developing world entrepreneurs. The implication is that developing world entrepreneurs are more deserving, or more in need, of Kiva loans than developed world entrepreneurs.

We neither define poverty for our community, nor do we define which countries are more deserving, or more in need, of Kiva loans than another. Each time a new country is added to Kiva’s global portfolio, there is a risk that loans to entrepreneurs in this country might be more highly desired by the Kiva community than loans to entrepreneurs in another country. For example, loans to entrepreneurs in a post-conflict area that is experiencing high exposure in the media may be more popular than loans to entrepreneurs in a peaceful country with little attention by the media.

To ensure that Kiva’s global portfolio does not become “overwhelmed” by loans to entrepreneurs in one country, or one region of the world, Kiva enforces fundraising limits on each Field Partner, which contribute to a country limit of no more than 10% of the entire global portfolio. These country limits allow Kiva to both minimize risk to Kiva’s loan portfolio as a result of events on a national scale, and also to maintain a well-balanced global portfolio.

4 – “Loans to the developed world have fundamentally changed what Kiva is.”

We understand that for some in the Kiva community, facilitating loans to developed world entrepreneurs feels like a fundamental shift in what Kiva is and stands for. While we recognize that this sentiment exists, we respectfully do not share it with those who feel that way.

To us, Kiva has always been about making loans to people around the world. As the fundamentals of Kiva, for us, were never defined by country, we don’t feel that we have fundamentally changed.

5 – “Listing developed and developing world entrepreneurs side-by-side, on the same platform, is insulting to the developing world entrepreneur.”

There have been suggestions that Kiva should build a second website to facilitate loans to developed world entrepreneurs, in order that they not be listed alongside developing world entrepreneurs. The implication is that entrepreneurs from the developing world are so different from developed world entrepreneurs, that grouping them together is offensive to either group.

Our opinion contrasts entirely with this sentiment. Kiva believes that loans promote dignity and mutual respect, and we endeavor to carry these qualities through all areas of the Kiva platform.

By separating entrepreneurs according to the part of the world they are from, we would be highlighting the differences between them, based on geography. Kiva strives to highlight the similarities between entrepreneurs across the globe, not the differences, based on personal qualities, not geographical location. By focusing on personal qualities, we believe we can encourage the type of dignity and mutual respect developed when meeting a person.

Furthermore, the feedback we have received from our contacts in the developing world, Field Partners and entrepreneurs, demonstrates that listing developed world entrepreneurs beside developing world entrepreneurs is a source of pride, not insult. No longer are individuals differentiated according to the wealth of their nation, rather entrepreneurs from the poorest nations of the world are situated alongside entrepreneurs from one of the wealthiest nations of the world. We believe this promotes equality and engenders dignity, not insult.

About Jerry Ostradicky

I work in Advertising Operations at Zillow, but LOVE microfinance. I'm always interested in startups, especially non-profits, reach out to me if you're working on anything cool!