Small Internet Loans Make a Big Difference

tivoflann: People usually lend about $75
their first time
and we are just starting to see a lot of relending as well

imtracynotstacy: Would you call Kiva.org a success?

tivoflann: I don't think success is binary
it's an ongoing journey
story
that
evolves

imtracynotstacy: But how do you pay your employees?
4:32 PM

tivoflann: Our lenders pay us an optional fee
a tip, if you will
out of that, we were nearly break-even last year
we also are funded by foundations like the rockefeller and kellogg foundation

imtracynotstacy: Is this the first idea you've ever conceived of that evolved into a business venture?

tivoflann: i sold christmas trees once
but YES
i had many false starts and stutter steps

imtracynotstacy: So why do you think this one held and is working?
4:34 PM

tivoflann: a few things
first, we cared about the idea in and of itself
we weren't doing it for some huge outcome
we loved the process
every step was worth it
4:35 PM

tivoflann: second, it connects people to a cause greater than themselves
it has a power behind it much stronger than this one product or one brand or one company

imtracynotstacy: what is the power?

tivoflann: people naturally want to connect to other people
its pretty deep seated
and they are naturally generous
so this just allows them to do something they naturally want to do

imtracynotstacy: You corrected me earlier when I used the word "donate". Is there anything about this being a loan that makes the interaction different for the borrower?

tivoflann: most definitely
there's accountability
and dignity
I think that recipients of aid often resent benefactors even as they consume the aid

imtracynotstacy: it's like they don't have a choice
they have to take it
but they wish they had another option
4:39 PM

tivoflann: that's a generalization, but I basically agree

imtracynotstacy: did you want to add anything so it's not a generalization?

tivoflann: nah
sorry
im a philosophy grad student gone bad

imtracynotstacy: ha
So are you going build on Kiva in any way? refine it? or use the experience/knowledge to do something else?
4:44 PM

tivoflann: i think so
its a big idea that is just in its infancy
at a high level its to build the worlds first intl bank for the poor

imtracynotstacy: could you branch out from here to other areas? areas that are not specifically microfinance?

tivoflann: sure
theres a lot of different ways to go
who knows
education
health care
remittances
insurance
credit scores
products
4:48 PM

imtracynotstacy: I read a story in the NY Times the other day about how cell phones could help lift people out of poverty because it gives them access to potential jobs or other people....networking, I guess.

tivoflann: mobile is big

imtracynotstacy: do you see cell phones potentially playing a role? A bigger role?

tivoflann: definitely
a mobile phone user can receive a loan or give a loan to another mobile phone user
already happens in places like kenya and ghana
but not connected to kiva yet
4:52 PM

imtracynotstacy: yet?

tivoflann: it will happen
just so many hurdles to overcome

imtracynotstacy: what's an example?
of a hurdle?
4:55 PM

tivoflann: I wrote about it here
MFIs provide credit analysis
Collections
and a place to accept deposits
all things that would be harder with cell phones
not to mention identity tracking
4:57 PM

imtracynotstacy: harder WITH a cell phone?

tivoflann: sure

imtracynotstacy: I don't understand

tivoflann: a loan officer can verify the identity of a poor women in rural Uganda
in a way that your cell phone cannot
a loan officer can collect and motivate repayments from that women
so its just harder in some ways, and easier in others
its cheaper to send money to a cell phone
than to have a loan officer ride a bike many kilometers with cash
5:02 PM

imtracynotstacy: I see
How old is Kiva.org?

tivoflann: our company was formed in late 2005
so 2.5 yrs

imtracynotstacy: Do you have a 5-year goal?

tivoflann: most of our goal setting has been focused on 2010
we want to be lending at least $100M per year by then
and be cashflow positive

imtracynotstacy: You will help a lot of people

tivoflann: hopefully our lending community will be able to help so many many people yes
5:08 PM