Published on December 13th, 2013 | by Derek Markham0
Kiva Launches Microfinance and Crowdfunding Platform for Social Enterprises
Leading microfinance and crowdfunding provider Kiva is launching a new initiative for funding social enterprises and green projects in areas such as clean energy, education, and agriculture, thanks to a $3 million Google Global Impact Award.
Microfinance initiatives such as Kiva have already helped to alleviate poverty for millions, by providing capital to start and grow businesses that can have immediate impact in their lives. However, current microfinance providers and lending institutions are still reluctant to provide this kind of flexible capital to many people that could benefit from them, including students, subsistence farmers, and plenty of others that either live in extremely rural areas or are otherwise unable to get access to funding.
But with this new microfinance and crowdfunding program, called Kiva Labs, Kiva aims to provide critical capital to NGOs, social enterprises, nonprofits, and other microfinance institutions, in order to expand the reach and social impact of these groups that create innovative and effective solutions to alleviating poverty and creating economic opportunities.
“Kiva.org is using their $3 million award to launch Kiva Labs, a new initiative to deliver the power of crowdfunded loans to critical solutions in agriculture, clean energy, mobile information, and other transformative technologies. Loans crowdfunded through Kiva Labs are as varied as a bicycle-powered generator that charges lights for communities with no electricity to mobile apps that help farmers in isolated regions share real-time agriculture knowledge across communities with limited connectivity.” – Kiva
With this seed money from the Google Global Impact Award, Kiva Labs plans to generate $25 million in crowdfunded loans over the next three years, which will be used to provide flexible and risk-free capital to fund the efforts of over 100,000 borrowers that are otherwise under-served by traditional finance models.
“Kiva’s crowdfunded loans provide a unique opportunity to increase access to products and services that have a high-potential of success and impact, but are seen as too risky among traditional lenders. Through Kiva Labs we can prove what works, share what we learn with a global audience, and ultimately deliver new solutions into the hands of people who need them.” – Premal Shah, President and co-founder of Kiva
Kiva’s track record speaks for itself, by providing more than $500 million in crowdfunding for over 132,000 agricultural loans, 4,600 green loans, and 670 mobile tech loans, coming from one million individual lenders. The repayment rate on these microfinance loans is also quite impressive, with less than 1% of the loans failing to be repaid. In addition, because individuals can loan as little as $25 to the Kiva borrower of their choice, the program is a great way for individuals to get started in impact investing, without the need for access to large amounts of capital.