Monday, July 7, 2008

Why so many loans to fund???

I was inspired by an email from one of our most involved Kivans to explain why Kiva has been ramping up the number of entrepreneurs ready to fund on our site. At the time of this writing, there are 573 fundraising loans on our site. This is a significant increase from early January, when we were completely out of loans to fund!

So, I thought I’d give you a little background explaining this decision. You're probably aware that there are many technicalities that go on behind-the-scenes at Kiva to ensure that a loan is ready to fundraise on our site, such as translating and validating the information posted in entrepreneur profiles. One such technicality is that historically we have capped the number of loans exposed on the site quite low, even though we have a behind-the-scenes system backlog of all loans posted to Kiva.

That means that the number of loans sitting in the Kiva loan backlog, waiting for their turn to be funded, is pretty high. Often, those loans can sit in that backlog for tens of days. This negates the usefulness and timeliness of the loan to the entrepreneur and it means that loans will expire and never reach the site for a chance to be funded. So, our decision to expose as many loans as we possibly can (eventually everything that's been entered into the Kiva system and reviewed) is based on a desire to make sure that, increasingly, all loans posted to Kiva get a chance to be funded.

It’s important to understand that the number of loans seeking funds on the Kiva site isn’t necessarily increasing; we’re just exposing them earlier. There’s something more transparent about exposing all of the entrepreneurs who are seeking to fundraise, rather than holding the majority back.

That said, there are some things we recognize we need to do and are currently working on in order to make Kiva a better site given the large number of loans fundraising: 1) Start giving lenders partial credits as their loans are repaid rather than waiting for the loan to fully repay; 2) Improve the Lend tab so it can be better about showing you loans that are most interesting to you. As you can imagine, these are both difficult undertakings and so will take a few months to complete, but they’ll hopefully make the influx of fundraising entrepreneurs easier to bear.

If you want to comment on or discuss this blog post, I encourage you to visit the lender-run discussion boards at (run independently of Kiva).