Page 140 - Social Enterprise A New Business Paradigm for Thailand

helped build its online financial transaction system (Berg, 2014). Headquartered in San
Francisco, with branch offices in Nairobi and Portland, Kiva maintains a global network of over

450 volunteers. As of May 29, 2024, individuals can lend or invest starting from as little as 25
USD. The organization has served over 5 million underserved individuals worldwide, disbursing
more than 2 billion USD in loans with a 96 percent repayment rate. Major corporate partners
supporting Kiva include eBay, Visa, and TripAdvisor (kiva.org).

Kiva operates under two core philosophical principles: (1) People come before money, and (2)
Progress should be emphasized over poverty. Rather than appealing to pity, Kiva encourages
lenders to imagine a world where participation drives development (Berg, 2014). The business
model behind Kiva was inspired by the educational scholarships offered by charitable

foundations, which are often funded through public donations. Flannery viewed lending as a
powerful form of connection, an exchange of stories and data, that strengthens the
relationship between borrowers and lenders.

Kiva’s standout feature lies in its use of digital technology to reduce the high costs typically
associated with finding and managing investors. Its platform enables easy access for individuals
interested in micro-investing, with low minimum commitments. To identify potential
borrowers, Kiva partners with field organizations, micro-lenders around the world, that are
responsible for vetting, collecting, and evaluating borrower information and life stories. These

are then submitted to Kiva, where volunteer editors and translators help refine the loan
proposals before publishing them on Kiva.org. Lenders can browse profiles and contribute
directly through the site. As a result, Kiva’s website must remain dynamic, continuously
updated with compelling borrower stories to keep visitors engaged and inspired to lend.

One of Kiva’s ongoing challenges is its inability to pay interest to lenders, even modest amounts,
due to legal restrictions associated with its tax-exempt status. Interestingly, the organization’s
founders believe that not paying interest may actually preserve borrower dignity by reinforcing
the idea of partnership over charity. However, Kiva has occasionally been criticized for giving

lenders the impression of direct borrower engagement. In reality, most borrowers receive
funding in advance from Kiva’s microfinance field partners, and the money lent by individuals
is later channeled back to those partner organizations.

3. Impact Investors
Impact investors are individuals, groups, or organizations that allocate capital to businesses,
nonprofit organizations, and investment funds with the intention of generating positive social and
environmental impact alongside measurable financial returns. This investment strategy targets
solutions to pressing global challenges such as climate change, poverty, and inequality, while

simultaneously achieving quantifiable financial performance.

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