Kiva enables Field Partners to raise 0% interest debt capital directly from social investors worldwide using the internet.
Historically, Kiva has worked exclusively with microfinance institutions to manage and administer our loans. But in late 2011, we opened up our platform to accommodate additional types of partners, including for-profit social businesses, schools and non-profit organizations. These "non-traditional" partners are united by a common commitment to serve the needs of people at the bottom of the pyramid, either through financial services or by using credit to help expand access to pro-poor products and services. Since launching in October 2005, Kiva has grown to over 150 partners in more than 60 countries.
Partnership selection requirements
In order to work effectively with Kiva, a Field Partner must be able to:
- Take digital photographs of borrowers
- Write borrower and business descriptions
- Write at least one update per borrower
- Upload photographs, business descriptions and updates to the Kiva website
- Communicate via email and access the internet regularly
- Speak English, Spanish or French
- Legally accept US dollar debt from a foreign lender and be able to repatriate funds
- Manage foreign exchange risk
Minimum criteria for Field Partners
Because Kiva partners have a range of financial needs, we have developed a tiered due diligence structure to accommodate organizations' needs. At one end of the spectrum, we spend time on-site and conduct an in-depth financial analysis before bringing on a partner. This represents our full due diligence process.
At the other end of the spectrum, we allow partners to use Kiva experimentally at small dollar amounts before we mutually agree to scale up. For these partners, we do not know about their operational or financial situations in depth, but we have solid reasons to trust their social mission and intentions. Here is a look at the 3 tiers of partnership available to organizations:
- Full Due Diligence: Field Partners with a full due diligence designation are able to raise large dollar amounts on Kiva, with credit lines of up to $2 million. These partnerships are reviewed and approved on a case-by-case basis by Kiva's investment team.
- Basic Due Diligence: Field Partners with a basic due diligence designation are able to raise mid-sized dollar amounts on Kiva, with credit lines of up to $200,000. These partnerships are reviewed and approved on a case-by-case basis by Kiva's investment team.
- Experimental Partnership: Field Partners with an experimental designation are able to raise small dollar amounts on Kiva, with credit lines of up to $20,000. These partnerships are not reviewed by Kiva's inevstment team, and little to no due diligence is conducted.
All potential Kiva Field Partners, irrespective of their due diligence designation, must:
- Display a strong commitment to serving the needs of the bottom of the pyramid
- Have a specific and defined need for small-scale, beneficiary-level finance
- Have the capacity to maintain a partnership with Kiva, including posting and managing online loan profiles
- Be registered as a legal entity in its country of operation
- Serve at least 1,000 active borrowers with microfinance services. (Not a requirement for US partners)
- Have a history (at least 2-3 years) of lending to poor, excluded, and/or vulnerable people for the purpose of alleviating poverty or reducing vulnerability
- Have at least one year of financial statements (unaudited financials are acceptable for basic due diligence partners)
- Have a strong social mission and a clearly defined use for Kiva funding
- We also prefer an MFI to have a profile on the MIX Market
For full and basic due diligence partners, Kiva's investment team works with each organization to understand the specific role of 0%, beneficiary-level capital in their organization. We believe that subsidized funding can have immense transformative value in for- and non-profit models, and we strive to apply our funds in the most impactful way possible. For a discussion of the specific role Kiva financing plays within each organization, please see the "Why we partner with this organization" box on Field Partner profile pages.
To learn more about the requirements for partnership by due diligence category (full, basic or experimental), please see Kiva's Role in risk and due diligence.
Benefits of working with Kiva
There are a number of benefits to being a Kiva Field Partner. Among these are:- 0% interest debt capital.
- Increased exposure through the Kiva website. Kiva's transparent online platform exposes your work to a worldwide audience of over 1 million social investors.
- Ability to benefit from foreign exchange "stop-loss" protection.
- Easy to pilot. Once approved, and a contract has been signed, your organization can begin posting on Kiva quickly, even within a few weeks.
- Low administrative cost. Data indicates Kiva-related administrative costs to be less than 1% of capital raised on Kiva.
- Improved staff morale. Surveyed Field Partner staff love using Kiva. It is easy to learn, not time consuming, and their work gets to be appreciated on a global scale.
How it works
Website activity: Field Partner posts client profiles online on Kiva (can be done in a batch after funds have been disbursed to clients). Client loans are funded by social investors online.Funds transfer: Kiva aggregates the 0% interest US dollar capital and wires it to its Field Partners on a monthly basis. Partners use Kiva's funding to reduce their overall cost of capital and increase their own organizational sustainability.
Reporting: Kiva's social investors provide subsidized capital in exchange for impact transparency. MFI's must report on the social impact loans make for clients at least once per loan term.
Repayment: Kiva's software automatically reports payments based on expected client repayment schedule. Field Partners only need to report when a payment is off schedule. Kiva automatically nets out reported repayments from new funds originated on the website each month, reducing need for Field Partners to wire funds back to Kiva.
Costs associated with working with Kiva
No interest rate charges: 0%. Kiva doesn't charge interest and passes 100% of the funds lent on the website by social investors. Kiva supports its low cost internet operations by charging social investors optional fees. Kiva has been a self-sufficient 501(c)3 US non-profit organization since November 2006.Cost of staff time to post borrower data: 0.2 to 2%. Based on time-study data of Field Partners using Kiva, the cost of staff time to post and maintain each client profile on Kiva ranges from less than $1 to $10. The average Kiva loan raised per client profile is $500.
Foreign exchange hedging cost. This cost varies from country to country. All Kiva loans are in US dollars. However, Kiva offers its Field Partners the ability to "stop-loss" their foreign currency risk. If a partner chooses to enable currency exchange loss, it will not have to suffer the full impct of a revaluation of the US dollar above a certain threshold. If the feature is chosen by the partner, its foreign exchange loss is limited to a 10% revaluation of the US dollar relative to the local currency. This means that the partner would not have to repay more than an extra 10% in local currency relative to the amount disbursed, regardless of how sevrely the US dollar revalues relative to the local currency. Any foreign exchange losses above the "stop-loss" threshold is borne by Kiva lenders.
Total cost of Kiva capital: 0 to 1% (excluding currency risk). For most Field Partners, Kiva represents the cheapest source of US debt capital available.