Kiva Co-founder on the Future of Microfinance

Wednesday, July 22, 2015

Jessica Jackley has had her hands full since stepping away from Kiva, the peer-to-peer microlender she co-founded in 2005. Between investing in startups through the Collaborative Fund; launching ProFounder, a crowdfunding site for entrepreneurs and small businesses; and consulting with companies to improve their social impact, the popular TED talker has also managed to give birth to three children. And she has a new book, Clay Water Brick: Finding Inspiration From Entrepreneurs Who Do the Most with the Least.

I met with this very busy entrepreneur at this year’s Dell Women’s Entrepreneur Network Summit in Berlin, where she gave a keynote. Our interview ranged from the future of microfinance to the one-for-one social enterprise business model popularized by Toms’ Blake Mycoskie. Here’s an edited excerpt:

What’s new with Kiva?
I advise the company, but I’m not a board member or a staff member, so I’m not there day to day. But I can say that the organization has been experimenting. Old Kiva is: lender, Kiva, microfinance institution as the field partner, and then the borrower. The field partner would administer the loan, collect payments, et cetera. The new model–that is, Kiva Zip–is more lender, borrower.

Kiva is there as a trustee to kind of vouch for the individual. It will get more and more direct over time.

Kiva Labs is another really great initiative. It’s experimenting around loan terms, to figure out ways to make sure the loan is really causing the most positive impact possible in the lives of the poor. Traditional, more-strict loan terms have not always ended up with the greatest social impact. Kiva Labs is trying to figure that out.

Kiva Zip seems like a response to criticism in 2009 over Kiva not brokering direct loans to borrowers. Is it?
I wasn’t there at the time, but Kiva has always offered direct funding transfers to other human beings, period. What happened was, over time, we transitioned away from real time. Instead of waiting for a person to send over the wired money, microlenders would just fund the loan quicker with their cash reserves. It was still connected to the borrower, but it would come from the microfinance institution. If the borrower didn’t pay, the onus was on the microfinance institution.

People got really upset, because even though it was written on the site, it wasn’t flashing in red letters like it is now.

Kiva Zip wasn’t a response to that at all; it was actually about making the process lighter.

Source: Inc. (link opens in a new window)

crowdfunding, microfinance, social enterprise