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$1 billion in change: How Kiva went from nonprofit startup to global force for good

Kiva just hit $1 billion in life-changing loans to people around the world! This is the first in a two-part series tracing Kiva’s path from nonprofit startup to nonprofit unicorn pushing the boundaries of lending.

There’s a persistent, toxic myth that people living in poverty don’t want to work, that they don’t dream of and strive for more, and that their lives are to be pitied.

But anyone from these communities, or anyone able to take time to travel and connect, knows nothing could be further from the truth.

The wealthy don’t have more feelings of joy and pride. The wealthy don’t have sole claim to being industrious or creative. People everywhere share these traits, and people everywhere want an opportunity to make a decent living and achieve their dreams.

We all just need an opportunity and people to believe in us along the way.

That concept is at the heart of everything Kiva does, and it’s what brought together a band of idealistic 20-somethings in 2005 to create Kiva.

The early Kiva team, including Jessica Jackley and Chelsa Bocci (left photo) and Matt Flannery and Premal Shah (right photo) with Nobel Peace Prize winner Muhammad Yunus.

Each of the members of Kiva’s founding team — Matt Flannery, Jessica Jackley, Premal Shah and Chelsa Bocci – were inspired by conversations they had during their own travels to Tanzania, Uganda, India and South Africa.

They each met hard-working entrepreneurs who needed a small amount of money to improve life for their families. One farmer needed a loan to grow his goat herd, one woman needed to buy a hairdryer to start a home salon.

The four wanted a way to help the people they met. They thought their friends would want to help too. But what truly ignited their passion for the project was the potential for a loan to create a fundamentally different relationship than a donation ever could.

“My experience in the past was that charity was more about pity, even if it was done with love,” said Chelsa, Kiva’s Vice President of Marketing and Community. “The idea of a loan shifted everything for me. The idea of being engaged in a partnership; that we are on the same footing, sharing the same ground.”

By building a platform where borrowers could share their own stories and lenders could choose whose dream to support, Kiva could be about something different — mutual respect and trust. But a big question remained: Would people embrace the opportunity to help strangers in this way?

Now try to harken back to the world of 2005. Online social networks were just emerging — Friendster and Myspace were enjoying their moment in the sun. Ebay and Amazon were increasing in popularity but the very idea of transferring money to strangers online was unproven and unusual. Muhammad Yunus was enjoying accolades for his work in microfinance in Bangladesh, but he hadn’t yet won the Nobel that would soon rocket him to widespread fame.

All the pieces were falling into place.

“Kiva felt like an idea whose time had come. And because of that, really the first 36 months felt like a boulder rolling down hill with a small band of people running after it,” said Premal, Kiva’s President and Co-founder.

That small band of believers worked for months without taking a salary, pulling all nighters in Premal’s shared apartment in Palo Alto, waking up to boxes of stale pizza and a white board filled with midnight epiphanies.

Strategy sessions were held at their other “office,” a divey restaurant in San Francisco’s Mission neighborhood.

The Kiva website in 2005.

Jessica recruited the first borrowers and took the photos for their loan profiles herself. Matt created the website in one weekend.

The team held house parties where the price of entrance was making a loan. They traded a guitar to a graphic designer to create Kiva’s first logo.

They set aside other career paths or plans to go back to school. They worked All. The. Time.

From the beginning Kiva spread by word of mouth and among a very enthusiastic blogosphere. Once people began to receive repayments from the borrowers they supported, they told their friends about it.

The team raced to keep up with demand and to continue to improve the codebase.

“We literally couldn’t keep up with people’s enthusiasm to share their money for free with someone who could put it to good use,” Premal said.

Pablina’s loan helped her diversify her business in Paraguay, moving from honey production to growing vegetables. The photo on the left was posted to Kiva with her loan request in 2007, on the right is Pablina 8 years later. Since receiving her loan, backed by 5 lenders, her business has grown and she now supplies several local markets. “I’m happy to see that there are other people who care… I hope they continue to help many other people, not just me,” Pablina said.

But for all the enthusiasm they heard from friends and fans who loved how personal Kiva felt, there were many, many doubters.

Experts in the development field didn’t think the model could scale, and weren’t convinced borrowers would repay, especially if they knew individuals were backing the loans.

Ironically, as Kiva worked to expand access to financial capital, the organization itself had a hard time getting a bank account. The banks they spoke with thought the idea was too far fetched.

They were peppered with legal questions and concerns too, to the point where Matt called the Securities and Exchange Commission just to make sure what they were doing was above board.

In those early years, the Kiva team also discovered they were being defrauded by some of the loan officers at partner organizations. They had to regroup and build out a robust due diligence program to ensure it didn’t happen again.

There were technical issues. Servers crashed too often. They didn’t have money for better equipment until a generous donor who believed in their vision started gifting them computers.

It was a chaotic time, but soon the dust began to settle and the numbers began to speak for themselves. Borrowers were paying back more than 97% of the time. It was working! The Kiva community funded $500,000 in loans in the first year alone. The team was awestruck.

Jackline, a farmer in Kenya, received a loan backed by 32 Kiva lenders to purchase a dairy cow. The photo on the left was posted with her loan on the Kiva website in 2010, on the right is Jackline 3 years later during a Kiva staff visit. She said, “Microfinance has helped me a lot. It helped me to develop my land, purchase a dairy cow and educate my children.”

The early doubts about scale were solved by finding and partnering with hundreds of local organizations working on the ground to facilitate loans and provide borrower services.

Volunteers played a key role in helping Kiva grow as well. Classes of volunteer Kiva fellows went into the field, identified new partners and helped Kiva continue to strengthen due diligence.

Volunteer translators and editors helped get each Kiva loan up onto the website in English so more people could read each borrower’s story. Today that volunteer corps of fellows and translators is more than 450 people strong.

The Kiva team grew thanks to donations from lenders, beginning one night when the servers crashed from heavy traffic. They invited “tips” while lending wasn’t possible and to their surprise raised $250,000 overnight. From then on, voluntary tip donations played a critical part in helping the organization grow, including adding expertise in engineering, law, financial systems and monitoring.

The word-of-mouth effect continued to fuel Kiva’s growth and helped address the scale question from the lender side. Advocates like Oprah, former President Bill Clinton and Pulitzer Prize winning journalist, Nicholas Kristof amplified Kiva’s reach. More and more individuals embraced the opportunity to create collective good with other lenders.

“When we first heard about Kiva, we jumped in right away,” said a long-time lender named Dakota. “We love helping people and having our kids learn that the world is in need and we have the opportunity and obligation to meet needs.”

“Kiva is by far the best example I’ve ever experienced of the power of the many,” said Mary, another dedicated lender.

And while Kiva continued to help individual entrepreneurs with small loans for their businesses and farms it also began to push the boundaries of what a loan could do. By lending as little as $25, millions of Kiva lenders had created a pool of patient capital that could help in situations where funding was especially hard to come by.

Kiva began providing loans in post-conflict and post-disaster areas, where borrowers needed funding to help rebuild or reestablish their communities.

Gerilina used a loan backed by 9 Kiva lenders to rebuild her business in the Philippines after the devastating Typhoon Haiyan. The picture on the left was posted to Kiva in early 2014, the picture on the right is just 3 months later with Gerilina’s new home and business.

Kiva branched out into funding medium-sized businesses that would create sustainable jobs in their communities and social enterprises in need of larger loans to help them increase their impact. Loans to refugees and internally displaced people were introduced to help vulnerable communities in dire need of stability. Kiva took on inequity in the U.S. as well, helping reach social impactful and financially excluded borrowers across the country.

Loans for education and access to green energy technology opened up new ways for borrowers to improve their futures and build healthier environments.

Starlyn received a Kiva loan backed by 243 lenders for his tuition in the Dominican Republic. The photo on the left was posted with his loan in early 2015, the photo on the right shows Starlyn on campus at his university a year and half later. He said the Kiva loan has been “un gran alivio” (a great relief) because he can cover his tuition expenses, finish his coursework on schedule and attend one of the best universities . After graduation, Starlyn plans to become a publicist and hopes to open his own advertising agency later in his career.

Nearly 12 years in, Kiva is continuing to find innovative ways to channel the community’s passion. No matter what your cause is, there is a way to support it through Kiva.

There are now 1.6 million lenders funding $1 million in loans every 3 days. And the community is at the doorstep of an incredible milestone: $1 billion in lending to 2.4 million borrowers around the world.

“The fact that we are hitting a billion dollars is mind blowing. But more than the billion number, it’s about the people who’ve been connected and whose lives have been enriched,” said Premal. “I love that Kiva for many people is their first view of people in another country. Hopefully it creates admiration and respect versus pity and fear.”

For Chelsa it is also a full circle moment to reflect on what Kiva has become.

“I feel really proud and it’s not about any individual anymore,” Chelsa said. “It’s about a collective movement made up of everyday heroes. Kiva has a life of its own.”

Read part two of this series, focused on the different areas of lending on Kiva, and the impact created by $1 billion in loans. Or visit to be a part of #1BillionInChange

About the author

Talea Miller

Talea is excited to combine her love for powerful storytelling and her digital strategy experience. She comes to Kiva from the Kaiser Family Foundation, where she managed digital strategy for the foundation's consumer-focused PSA campaigns. Prior to that she was a reporter and producer at the PBS NewsHour for five years. At the NewsHour she had the opportunity to travel extensively in the developing world as part of the program's global health unit, covering a wide range of stories including the aftermath of the Haiti earthquake, doctor shortages in Tanzania and the mistreatment of the mentally ill in Indonesia. In addition to being a news junkie, Talea enjoys photography, hiking and attempting to paint. She graduated from Northwestern University with a B.S. in Journalism and is originally from Maryland. So she also knows a lot about horses.