First Web site to let anyone with a PayPal account be a "banker to the poor" marks first year with unprecedented success
SAN FRANCISCO, CA - October 17, 2006 -Kiva.org, the first person-to-person micro-lending Web site that enables an individual to finance a micro-entrepreneur in the developing world, marked its first year anniversary. Since its launch, Kiva.org has become known as "the merger between Microfinance and Web 2.0" due to its ability to create a transparent, connective and affordable option for anyone on the Internet to lend directly to the working poor. Inspired by Mohammad Yunus and Grameen Bank, Kiva's aspiration was to take microfinance online; in just one year, the organization has been widely recognized as the leader in online microfinance, has attracted a significant base of lenders, borrowers and partners, has built a staff and board of directors, and has received accolades from the press and industry leaders.
Since launching one year ago, Kiva.org has:
- Become the most trafficked website in microfinance with over 250,000 visitors
- Raised $430,000 in loans in $25 increments from more than 5,400 users
- Provided capital for 750 micro-enterprises in 12 developing countries
- Grew its partner network to 14 partners in Africa, Asia, Eastern Europe, the Middle east and Latin America
- Partnered with PayPal, an eBay company, to provide free payment processing on an ongoing basis-PayPal's first such partnership
- Received invitations to speak at the Clinton Global Initiative in New York and Global Microcredit Summit in Canada
- Achieved a 100% repayment rate on 28 completed loans thus far. Kiva expects the long term repayment rate to match the 97% microfinance industry average.
- Built a strong grassroots following in the blogosphere (+1,300 blogs including Daily Kos and Huffington Post), on campuses and on MySpace
"Kiva has all the characteristics of a service that will attract hundreds of thousands or possibly millions of users," said Reid Hoffman, chief executive officer of LinkedIn and Kiva.org board member. "With Kiva, you can deploy a small amount of money to enable economic self-sufficiency for someone living in poverty. And the fact that you get paid back makes it even more compelling. It creates a sustainable solution to poverty alleviation - where your loans can constantly enable new micro-entrepreneurs - or instead withdraw your cash when you need it."
Kiva spent much of its first year finding and vetting local microfinance partners worldwide. These partners screen each micro-entrepreneur and after finding them credit-worthy, post a profile of them on Kiva's site. Kiva then aggregates funds from the Internet community and transfers them to the local microfinance partner for funds distribution and collection. Anyone with a PayPal account or credit card can choose a specific low income entrepreneur and make a 0% interest loan in $25 increments. The impact of each loan is recorded on Kiva's Web site and Internet lenders are usually repaid 12 months later.
"The response from the public has been overwhelming," said Kiva.org co-founder and CEO Matt Flannery. Flannery, a Stanford-educated engineer who worked at TiVo while developing Kiva as a side project, quit his job late last year once website traffic began to overwhelm the site. Soon after, other Silicon Valley friends left their jobs to commit to Kiva, including six-year PayPal veteran Premal Shah, who joined as president, and Olana Khan, a six-year Google veteran who joined as chief operating officer. Flannery added, "If someone would have told me that Kiva would grow so quickly in the space of 12 months, I would have never believed it. Using the Internet to make one-to-one financial relationships possible between the rich and poor, based on the principals of dignity and accountability, has succeeded more than any of us expected."
Kiva.org is the first person-to-person micro-lending Web site, creating a way for individuals to connect with and make personal loans to small businesses in developing countries. Launched in October 2005, Kiva's goal is to reduce poverty in developing countries by giving entrepreneurs the ability to build their businesses through flexible loans. Kiva is a 501(c)3 non profit organization that receives free payment processing from PayPal so that 100% of loan funds can reach the micro-entrepreneur and 100% can be repaid to the Internet lender. Kiva is the most trafficked site in microfinance and has been featured in major blogs, news publications and global conferences such as the Clinton Global Initiative. Kiva is headquartered in San Francisco, CA.