I had never heard of Kiva until last week, but in checking it out a little it seems to connect people and create a community like we have discussed in class in a big way.  Besides the obvious of lenders connecting with poor entrepreneurs, Kiva has other little ways of connecting people with people.  There is a page dedicated to free banner advertisements you can put on your website promoting Kiva and the microfinancing it’s involved in.  There is a Kiva Fellows program where you can go and visit and meet the entrepreneurs you have been lending to.  The Kiva Blog keeps people updated on new entrepreneurs and new happenings, and the Supporters page lists all the institutional and corporate supporters Kiva has, and the ways in which those organizations help.  It really seems like Kiva has done a great job of going beyond its initial purpose of connection and has found ways to bring people together and collaborate in a unique way.

The Father of microfinance, Muhammed Yunus, has a bone to pick with kiva.org, one of the biggest players in the microfinance industry.    In Yunus’ new book “Creating a World Without Poverty”  he argues that microfinance institutions should be penalized if they charge more than 15% above their long term operating costs.

To counter, Kiva says that these rates are fair because they are much better rates than the traditional local alternatives.    Kiva also points out that the costs of making a loan in a developing country are greater than in the West.

Similar idea as Grameen Bank,  Kiva is a microfinancing firm that lends small amount of money to the entrepreneurs in the poor countries.

Since Japanese cultural background  does not seem like to be understanding the concept of investing their money like a business and helping others at the same time, in which process people think just giving money as a volunteer look more perceptually virtuous, it’s growth is overly slow.

Started on September 2, 2008, Kiva Japan project only has 32 team members and total amount loaned for 675 dollars. Compared to Kiva Christians, which started around the same time and that has 3827 team members and more than a million dollars invested, it seems to be a rough start.

What needs to be done is to get the word spread out. In Japanese Internet system, people usually using computer all the time are very responsive with what other “opinion leaders” within the community, so using it will give a blast in the marketing/PR on Kiva Japan. Advertising does not do anything to the users anymore, so it is important to have someone who has credibility toward the crowd do it.

It could  be a rough path for Kiva international, but as long as they keeptrying in a right way, there will be a light.

The husband and wife duo of Matt Flannery and Jessica Jackley are great examples entrepreneurs with a passion. After a trip to Kenya, they wanted to come up with a way to better help struggling entrepreneurs in developing countries, so they came up with the idea of Kiva. At first their business plan was pretty straight forward: “An online platform would allow ordinary people to invest in small and medium enterprises (SMEs) in the developing world.”

In developing the idea, they ran into a tremendous amount of resistance and criticism from a variety of sources. They also didn’t know whether to make it a profit or non-profit business. Each had its advantages and disadvantages, but one of the major draws of a non-profit was that it would be a bit simpler and quicker to set up. With the true entrepreneurial mindset, they just went for it and dove right into starting it up.

Flannery thought about converting it to a for-profit business at one point, so a survey was conducted. The results showed that 50% of Kiva users would not lend if the site adopted a for-profit model. It was a struggle and they had to overcome many obstacles, but Kiva has become one of the fastest growing non-profits in history.

Kiva.org, a “peer-to-peer online microlending nonprofit organization,” is successful largely because of the organization’s ability to humanize the lending experience.  Kiva’s Field Partners lend to and profile aspiring entrepreneurs, including photographs and stories in the entrepreneur’s profile.  Lenders, members of the general public, browse Kiva, select an entrepreneur’s profile, and lend funds via PayPal or a credit card.  Kiva provides the funding to the Field Partners, who eventually are repaid by the borrowing entrepreneurs, and the money works its way back up the chain.  This brief synopsis of the business model begs the question, “why then does Kiva work?  Couldn’t traditional lending methods handle this better?”

The answer is the humanization factor.  It is far easier to secure money from lenders when the lenders can directly observe the impact of their financing generosity.  Factors that might inhibit funding in a traditional lending system do not impact Kiva’s business model in the same way.  Kiva is filling a niche and creating value in a global economy, and, therefore, ought to continue to grow and experience success in the foreseeable future.

If you are interested in entrepreneurship of any sort I urge you to check out kiva. Kiva is a place where people can get on the world wide web and help to fund the dreams of entrepreneurs from all over the globe. With a donation (repaid by entrepreneur) as low as 25 dollars, donors are able to help entrepreneurs start there own businesses in order to come out of poverty. This site is a wonderful way to network and help out people around the globe. The best benefit is that it comes at no cost to you seeing that you will get your money refunded in time! This is a wonderful idea! Check is out….