MICROCAPITAL STORY: Public Shows Strong Interest in Participating in Microfinance through Kiva.org

Starting in September, demand by would-be lenders repeatedly outstripped supply of microloan requests at Kiva.org’s website. Kiva.org is a non-profit organization whose website allows individuals to connect and provide microloans to micro entrepreneurs in the developing world. Particularly with the holiday season, there have been periods when every loan request on Kiva has been filled, leaving potential investors visiting the site dumbstruck.

The public clearly demonstrates its interest in microfinance through Kiva’s increased participation. In December, Kiva gained 49,000 new lenders, with 4,000 joining on Christmas Eve. This week alone Kiva reports 5,537 new lenders and 1,075 loans funded. Furthermore, a Kiva loan on average is funded in 15.50 hours. Kiva expects demand to stay elevated in the New Year, as gift-certificate sales reached about USD 2 million over the holidays, $259,000 of which happened on Christmas Eve.

Given its recent success, Kiva has temporarily limited individual loans to USD 25, which is also its minimum loan requirement. This is to allow as many potential investors to participate. Kiva also suggested that interested individuals check the website periodically, as updates feed in 24 hours a day.

With phenomenal amounts of press, Kiva’s total loan portfolio has reached USD 21.8 million, comprised of roughly 33,000 loans from roughly 244,000 lenders. Kiva also reports a current repayment rate of 99.86 percent and 40 countries from which lenders can choose.

MicroCapital has followed Kiva’s progress in 2007 as well as covered its initial interest in 2006. More recently, MicroCapital also reported on IBM’s 2008 Podcast Series which includes “The Future of Microfinance”.

by Jennifer Lee

Additional Resources:

New York Times Magazine: “Consumed: Extra Helping” by Rob Walker

BusinessRecord: “Global Reach” by Joe Gardyasz

Kiva.org: Facts, About, Journal

MixMarket: Kiva

MicroCapital.org article, January, 24, 2008, “IBM Launches 2008 Podcast Series, Features ‘The Future of Microfinance.'”

MicroCapital.org article, July 19, 2007, “Peer to Peer” (P2P) Microfinance Business of Kiva.org (Kiva) Funds over USD 8.9 Million Internationally for Micro Loans.”

MicroCapital.org article, August 8, 2006, “Kiva.org Gets the Press It Deserves for Microcredit Investment.”