Monday, August 3, 2009

A Message In Response to Your Questions About the U.S. Pilot

Dear Kiva Lenders:

On July 24th, we posted a brief announcement to the Kiva blog updating the community on our next steps with regard to the U.S. pilot. We thought it was important to update the Kiva community on the status of the U.S. pilot as soon as we could. However, we also believe it’s important to let you know some of the thinking behind our decisions, which is what we hope to accomplish in this post.

Through this open letter, we hope to do the following:
  • Summarize the events since the U.S. pilot launch,
  • Respond to some of the questions that have been raised by the Kiva community,
A Summary of Recent Events

On June 10, the first U.S. entrepreneurs were posted to the Kiva website. This was the launch of Kiva’s U.S. pilot, in which two new Field Partners were added to Kiva's global portfolio: ACCION USA and Opportunity Fund.

The U.S. pilot was met by mixed response. Those who had been anticipating Kiva facilitating loans to U.S. entrepreneurs for some time, were excited. Some, for whom loans to U.S. entrepreneurs was a new idea, were pleasantly surprised. Others were also surprised, but did not support the U.S. pilot, and felt that it was a mistake. Some even felt that Kiva had betrayed them.

On June 19, we posted a letter here, to the Kiva blog, to offer some context as to how the U.S. pilot had come about, why we had pursued loans to U.S. entrepreneurs and our plans to move forward. You can read the letter here. We then promised to listen closely to the Kiva community as the issue was discussed.

We collected feedback from the community in a number of ways:
  • Emails were received by our customer service team, at,
  • We initiated an online poll that asked “Do you support Kiva's decision to allow loan requests from the U.S.?”, and read your comments
  • We read your comments posted to the letter posted on this blog on June 19
  • We monitored messages posted to Lending Team message boards
  • We monitored discussions hosted on
  • We hosted a Community Conference Call on July 15th in which lenders were invited to give their feedback on the U.S. pilot
On the July 15th Community Conference Call, we also shared with the community what we had learned. During this call, we gave a presentation, prepared by one of our data analysts, which looked at the website activity since the U.S. pilot launched, and interpreted findings based on this data.

On July 24th, as promised, we updated the Kiva community on Kiva’s decision to continue the U.S. pilot. You can read that blog post here.

Our Response to the Main Criticisms

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?

Kiva’s Definition of Poverty

We believe poverty is a global phenomenon, and can exist in every country around the world. We do not believe poverty is bound by national border, race, gender, ethnicity, citizenship, educational background, or life experience. We believe poverty has the potential to affect any person, and that no-one is immune from poverty.

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.

Kiva’s Social Mission

Kiva’s mission is “to connect people, through lending, for the sake of alleviating poverty.”

We seek to achieve this mission, by partnering with microfinance institutions we believe target the poor, so that Kiva Lenders can connect, through lending, with the entrepreneurs served by those institutions. To do this, we examine each Kiva Field Partner’s social mission, and the ways in which they seek to achieve their social mission, during our due diligence process. Every Kiva Field Partner’s mission differs, and every Kiva Field Partner defines poverty differently. What is consistent, however, is that we believe each Field Partner we work with is targeting the poor according to their definition, and that their poverty definition matches that of many members of the Kiva community. In this way, Kiva hopes to connect Kiva Lenders with entrepreneurs who match their personal definition of poverty, not the poverty definition of just one group of Lenders.

There has been much discussion of a few particular U.S. loans included in the pilot launch. We understand that some of the entrepreneurs included in the U.S. pilot launch did not fall within the poverty definition of many in the Kiva community, and we know that there will always exist on the Kiva website, at one time or another, entrepreneurs that some in the Kiva community feel do not fall within their definition of poverty.

As we mentioned in our last post, we invite and encourage the community to give us feedback on these loans, as has taken place in the past, and as occurred during the U.S. pilot. The Kiva platform is designed to facilitate communication between Kiva Lenders and Kiva, between Kiva Lenders and Kiva Lenders, and between Kiva Lenders and Kiva Field Partners. As we receive feedback on the types of entrepreneurs the Kiva community would prefer to support, our Field Partners can further refine the loans they post to the Kiva website. This is precisely the type of feedback and reaction that the Kiva platform desires to facilitate.

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.

Looking Forward

Kiva is a young organization. Founded in 2005, we are now only 3 years and 10 months old. While we have together achieved much in that time, we are still young when compared to many organizations that have similar exposure and size of membership.

We will continue to focus on growing the impact we can create, together. We hope to continue to be an organization that tries new ideas to fight old problems, by focusing on innovation, technology, and community, all the while being transparent about our intentions, motivations and actions.

As we grow and develop as an organization, we will always value highly our lenders’ right to choose both the way in which they participate in Kiva, and the level of participation they prefer. We believe that allowing lenders to make choices according to their personal values and beliefs strengthens the Kiva community, bringing together individuals who differ on many levels, yet agree on the fundamental idea of lending for poverty alleviation.

As the Kiva organization continues to grow and develop, we will continue to value highly the feedback we receive from the Kiva community.

Continuing the Conversation

Kiva’s next Community Conference Call will be held on August 19th. While time limitations restricted us to only receiving community feedback at the July Community Conference Call, the August call will return to the regular Q&A format. We invite you to join this call if you would like to discuss the issues of this letter further. More details about this call will be posted to the blog in the coming weeks.

In the meantime, you are invited to submit your comments and questions to Kiva’s Customer Service team, via email, at or to join in the discussion at KivaFriends.

The Kiva Team