First-of-Its Kind Combination of Pro Bono Credit Ratings, Risk Management Training and Financial Support to Spur $1 Billion in Microloans to One Million People by 2015 Partnership Recognized by Clinton Global Initiative
SAN FRANCISCO, CA - September 28, 2009 - Kiva.org -- the world's first person-to-person micro-lending website -- today announced a landmark partnership with Moody's Corporation to bring their credit ratings and risk management expertise to online microfinance.
Kiva.org estimates that Moody's in-kind services and financial support will spur the growth of microlending through its website through improved transparency and analytical rigor, and an expanded on-the-ground presence. Kiva projects that the partnership will contribute towards raising $1 billion in microloans by 2015, benefiting an estimated one million people directly and 32 million indirectly through economic development and improved living standards.
The Kiva-Moody's partnership was recognized by the Clinton Global Initiative as a break-through innovation that harnesses the financial markets to address the global challenge of poverty.
More than 550,000 people have loaned $93 million to 230,000 entrepreneurs in 49 countries through 126 microfinancing institutions that act as Kiva's Field Partners. These MFIs post to the Kiva.org site profiles of local entrepreneurs in need of a loan, so that individuals can browse the profiles and choose someone to lend to. The MFIs also distribute loan funds and collect loan re-payments.
"Kiva's success is in large part dependent on the integrity of our Field Partner MFIs that facilitate the microloans made through our site," said Premal Shah, President of Kiva.org. "Moody's is known around the world as a trusted authority on credit, and its contribution to the Kiva network will help us enable our MFI partners to adhere to the highest standards, instilling greater confidence in individuals who want to lend money to make the world a better place."
The Moody's partnership will expand and improve the lending capacity of Kiva's MFI Field Partners and enhance their lending practices by bringing even greater analytical rigor, transparency and information to the Kiva marketplace.
- Moody's Investors Service will assign initial ratings, pro bono, to 20 of Kiva's MFI Field Partners, providing an independent assessment of creditworthiness that individuals can consider when selecting an entrepreneur to lend to.
- Moody's Foundation will fund the establishment of a Moody's Field Specialist Program to recruit local microfinance specialists who will help MFI Field Partners implement best practices in lending and loan servicing, and to identify new MFI Field Partners.
- Moody's Analytics will train Kiva staff, including Moody's Field Specialists, in credit risk management.
Kiva estimates that the Moody's Field Specialist Program will increase the number of MFIs fundraising for loans on its Website by more than 50 percent, to about 180, over the next two years, and expand the average loans per MFI partner by 20 percent to about $800,000, while also helping to reduce risk and default rates.
"By applying the social networking concept to the challenge of poverty, Kiva is making a dramatic impact on the lives of tens of thousands of people in countries around the world, as well as benefiting their families and their communities," said Michel Madelain, Chief Operating Officer, Moody's Investors Service. "We're thrilled to contribute to Kiva's efforts to alleviate poverty by utilizing our resources and expertise in credit risk."
Kiva.org is the world's first person-to-person micro-lending website, empowering individuals to lend to an entrepreneur across the globe. Founded in 2005, Kiva.org's mission is to connect people, through lending, to alleviate poverty. Over 550,000 people have loaned more than $93 million to 230,000 entrepreneurs in 49 countries. Currently, loans made through Kiva.org have a 98% repayment rate. Kiva.org is headquartered in San Francisco.
About Moody's Corporation
Moody's is an essential component of the global capital markets, providing credit ratings, research, tools and analysis that contribute to transparent and integrated financial markets. Moody's Corporation (NYSE: MCO) is the parent company of Moody's Investors Service, which provides credit ratings and research covering debt instruments and securities, and Moody's Analytics, which encompasses the growing array of Moody's non-ratings businesses including risk management software for financial institutions, quantitative credit analysis tools, economic research and data services, data and analytical tools for the structured finance market, and training and other professional services. The Corporation, which reported revenue of $1.8 billion in 2008, employs approximately 3,900 people worldwide and maintains a presence in 27 countries. The Moody's Foundation is a charitable foundation established by Moody's Corporation. Further information is available at www.moodys.com.