Kiva, a microlending platform that enables anyone to provide a small, but life-changing loan, to borrowers across global and socioeconomic divides, has proven the impact a small action can have. To date, $964M has been lent to 2.4M borrowers through the platform. Kiva’s President, Premal Shah, said it best, “You don’t have to change the world. You just have to change the world for one person. When you make something small, it allows you to feel like you can do it.”
Kiva is one of our favorite examples of a scaled tech nonprofit, and the 12 year old organization has become famous for its 98% loan repayment rate. Sounds amazing, right? Turns out that statistic may not be fulfilling the organization’s end goal. Premal joined us in conversation with Scott Budman of NBC Bay Area at Accelerate Good Global, and spoke to why a 98% repayment rate simply isn’t good enough.
Why? A 98% repayment rate is actually too good. It means the internet public is not taking enough risks, they are not funding the people who need it most. At Fast Forward, we always talk about how philanthropy should be the ultimate risk capital. The same is true with a Kiva microloan. Right now Kiva is challenged to figure out how to get the public to take higher risks through initiatives like the student loans program. Backing a student’s higher education is higher risk, but if it works, the rewards are immense. If Kiva can leverage risk capital to prove an individual’s repayment track record, that opens up a huge financial opportunity for those who are financially excluded.
Watch the full video here for more insights into Kiva, and some great entrepreneurial advice from Premal: