One of Kiva's borrowers in rural Guatemala
The world is beginning to endure an economic downturn as costs of living skyrocket along with energy and commodity prices. As a result, loan losses are expected to rise and lending growth is expected to drop. That’s not quite the same sentiment at the nonprofit micro-financing company Kiva, though.
With a newly appointed CEO and swift adoption of SaaS (software as a service) tools like Slack to scale global efficiencies, Kiva's ongoing focus on increasing the amount of money it can lend across the globe stays strong.
“In 2021, lenders on Kiva funded $223 million worth of loans to over 550,000 borrowers. Relative to 2020, this represents a 76 percent increase in loan volume and a 56 percent increase in the number of people we helped,” says Chris Tsakalakis, appointed as Kiva CEO in 2021.
According to the World Bank, more than 1.7 billion people around the world are unbanked and can’t access the financial services they need.
Therein lies solutions like those that Kiva offers to loaners and borrowers. Launched in 2005 in San Francisco, the founders of this social enterprise have rewritten the playbook on how to boost access to finance in order to help underserved communities thrive.
Kiva operates on a unique micro-financing model where anyone can pick an individual to help through its platform with as little as $25. The average loan repayment rate stands at 96.4 percent, encouraging repeat lending. “In the face of uncertain economic times, this model of recycling and redeploying funds provides an accessible opportunity to be involved and do good, again and again,” Tsakalakis continues.
Since 2005, Kiva lenders have funded $1.4 billion in loans for more than 4.5 million borrowers across 85 countries.
Kiva has a global team across seven offices from San Francisco to Sierra Leone, along with a partner network of 300 organizations. The ability to streamline communications has helped Kiva and its partners thrive. For example, the organization’s adoption of the popular online communications tool Slack for its communications has helped scale up Kiva’s operations by containing conversations into a centralized hub. “By using tools that enhance asynchronous communication and connect dispersed workforces, we save money and time,” Tsakalakis tells TriplePundit. “The time it takes to fund each loan is based on many factors, including how many lenders we have. That said, we are incredibly proud of our ability to post a loan to the site and see it funded in a week, day, or even an hour.”
SaaS applications are known to boost productivity in organizations because of the flexibility and agility they provide in a continuously disruptive environment. As a result, at least one report has predicted that SaaS application revenue will surpass $300 billion by 2025, representing 52 percent of the total cloud software market.
One way in which to further scale and increase the nonprofit’s impact is the launch of Kiva Capital in 2020 and the expansion of its strategic partner program. “With Kiva Capital, we aim for large amounts of money from a few institutions and high net-worth individuals," Tsakalakis says. "Individuals and foundations that can make larger investments may contribute to one of our innovative funds, such as our Refugee Investment Fund, or their loans may finance an entire business or community initiative."
Some of the company’s new partners redefine the very notion of a corporate partnership.
“Our list of strategic partners continues to grow each year, and we’ve seen some innovative approaches,” Tsakalakis explains. “One example is our partnership with USWNTPA [U.S. Women’s National Team Players Association] that commenced this March. These women are not only talented athletes on the front lines of the fight for pay equity in sport, but they are also financially supporting women and communities of color across the U.S. through their Kiva partnership.”
From Tsakalakis’ perspective, such strategic partnerships are integral to adapting Kiva’s model to fit the needs of each organization. “If your institution is looking to get involved with Kiva as part of its CSR [corporate social responsibility] efforts, reach out to us without hesitation,” he says. “Whether corporations want to increase employee engagement, help specific groups of people, or support their employee resource groups and diversity, equity, and inclusion initiatives, we’re ready to explore options together.”
Moving forward, Tsakalakis would like to see an evolution in the metrics used to measure Kiva’s impact, as in one that focuses more on the financial health of Kiva borrowers rather than that the number or value of loans given out. “What happens on an individual level when someone receives a Kiva loan? Beyond financial assistance, how do Kiva loans help our borrowers and their communities before, during and after their loans? The shift towards measuring overall financial health of our borrowers will take time to implement throughout the organization, but we’re patient and excited about the potential this will have on increasing the amount of impact we can drive," he concludes.
Image credit: Kiva
Abha Malpani Naismith is a writer and communications professional who works towards helping businesses grow in Dubai. She is a strong believer in the triple bottom line and keen to make a difference. She is also a new mum, trying to work out a balance between thriving at work and being a mum. In her endeavor to do that, she founded the Working Mums Club, a newsletter for mums who want to build better careers and be better mums.