Small Internet Loans Make a Big Difference

4:04 PM

imtracynotstacy: hello

tivoflann: hello
4:05 PM

imtracynotstacy: Before we get started, can you tell me where you are?

tivoflann: im in san francisco

imtracynotstacy: Are you chatting with me from your office? Home?
4:06 PM

tivoflann: office

imtracynotstacy: Do you have a window?

tivoflann: many

imtracynotstacy: What's your view?

tivoflann: we are all in one big open room
we can see a taqueria
and drug rehabbers filtering in and out
since we share a building with a methadone clinic

imtracynotstacy: How does that work out?
4:09 PM

tivoflann: not great
it's pretty disruptive
the hallways are often crowded
many of the people come against their will as well
other than that, our office is wonderful

imtracynotstacy: It's always interesting to me to hear about people's work environment. I wonder if or how it affects productivity.
4:12 PM

tivoflann: things got a lot better recently because we cleared out cubes and work on tables more closely

imtracynotstacy: And how does that help your business?

tivoflann: hard to measure
but it feels like a happier place
more collaborative as well

imtracynotstacy: Nice. Could you tell me a little bit about Kiva.org and how it got started?

tivoflann: Kiva.org is a website where you can loan to another person to help them get out of poverty
We have entrepreneurs on our site from Africa, South America, Mexico, Asia, Eastern Europe and beyond
It got started when my wife and I spent about a month together in East Africa
and had the idea to lend to people to start businesses ... and to do it on the web
4:15 PM

imtracynotstacy: The people you lend to need to put their information on a website, right?
In order for lenders to get in touch with them. Is that right?

tivoflann: The low income entrepreneurs on the site mostly do not have access to the Internet
thus, they work with loan officers from microfinance institutions (MFIs) to get their loan on the web
We partner with about 100 MFIs

imtracynotstacy: Do those MFIs charge you or anyone a fee for that partnership?

tivoflann: MFIs charge their clients interest rates that vary country to country
They don't currently pass the interest back to the lenders
so the lenders are making 0% interest loans
and the entrepreneurs are paying interest which is kept by the MFI

imtracynotstacy: Could you walk me through a simple example?

tivoflann: Imagine a loan officer in Uganda who visits a rural village where people don't use the internet
4:17 PM
The loan officer comes from an MFI in a small town
the loan officer educates people about the idea of credit
and general business skills
The loan officer offers credit to people that only know of loans through loan sharks
at a socially motivated rate
the loan is funded through Kiva
lenders in the USA or Europe fund it within 24 hours
and the clients get a small loan to help scale a business
some examples would be tailoring, fish selling, goat herding, retail shops, bicycle repair and more
we've transacted nearly $30M in loans this way
4:18 PM

imtracynotstacy: So I could go to the Kiva.org site and front, say, $100 to a specific person? Or to anyone?
Do I chose?

tivoflann: You need to choose whom to lend to
there is a picture of every borrower on the site
as well as descriptions of the people and purpose

imtracynotstacy: And how does the money actually get there? Do you use Paypal or something?

tivoflann: We use Paypal to bring in the funds
we partner with PayPal which donates free transactions
we send the funds to/from Africa via wire transfer
4:20 PM

imtracynotstacy: So if I donate $100 to a person in that Ugandan village, my money gets to that person via the MFI rep, right? And they take some fee off that $100...or charge the borrower a fee a later date?

tivoflann: almost
You can't donate to a person
Only lend
and the MFI doesn't charge a fee or take any cut
except for interest on the loan
4:21 PM

imtracynotstacy: how do they get their interest?

tivoflann: they charge interest every month to the borrower in Uganda

imtracynotstacy: So are you saying that, as a lender, I would get my $100 back at some point?

tivoflann: It is likely, but not guaranteed
we have 99% repayment rate right now

imtracynotstacy: WOW!

tivoflann: but that will fluctuate
4:25 PM

imtracynotstacy: how are you using technology to make this all happen?

tivoflann: We use standard web technologies and PayPal
Our partners use digital cameras and dial-up modems

imtracynotstacy: How many borrowers have you enrolled (right word) on kiva.org to date?

tivoflann: Around 40,000

imtracynotstacy: Do you get feedback from these people?

tivoflann: Sometimes the loan officers blog about the progress
and we send volunteers around the world to blog as well
We call these blogs "journal entries"

imtracynotstacy: Where can people read the blogs?

tivoflann: The "Journals" section of our site at Kiva.org

imtracynotstacy: How much money do people typically lend?
4:30 PM