Kiva is a non-profit organization with the mission of connecting
people through lending to alleviate poverty.
Kiva accomplishes through microfinance institutions and through
leveraging the internet. On the website,
Kiva shows various profiles of borrowers that the lender can choose from. The lender will receive updates on the
progress of the loan and will be repaid when the borrowers have achieved their
goals. After a lender is repaid, s/he
can decide to keep this amount or relend it to another Kiva borrower. Originally appealing because of this person
to person lending, Kiva was scrutinized in 2009, by blogger David Roodman, for
not maintaining transparency. Instead of
this person to person lending, the borrowers shown on the site were already
backed by micro-financers. He found that
less than 5% of Kiva loans were disbursed after these profiles were listed on
the site. Kiva shows all of this
information on their website, but it is not clear to most users what all of
this means. On the right of the profile
picture is listed when the loans were “pre-disbursed” and directly below that
is information on the micro-finance institution or “field partner.” Kiva is technically not hiding any of this,
but is still misrepresenting the way that social good is being achieved.
Kiva’s borrowers approach a microfinance institution and
tell them what they are trying to accomplish and how much they need. Lenders become investors only in the sense
that they are invested in the stories of the individuals they appear to be
lending money to. Kiva is still achieving
what they set out to do, but the lack of true transparency sets them back. It seems that the tactic for most social
innovation is to maintain transparency and to gain an investment from the community.
Taking this conversation back to SIBs, would it be beneficial
to a social entrepreneurs to maintain transparency not only to the government,
but to the public? Will the idea and
support for social innovation, as a movement, be strengthened if the public
could provide moral support to these projects?
Can an establishment of a new policy achieve this level of transparency
with social innovators who apply for Social Impact Bonds?
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