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Kiva Plays Loose With the Facts

Posted by: Steve Hamm on November 09

Kiva.org has been one of my favorite social enterprises even since I started lending small amounts of money to poor entrepreneurs in developing nations a couple of years ago. To me, what was so compelling about it was you could read little stories about entrepreneurs then choose the one you want to back. At least that’s what Kiva said was happening. Turns out, that was a fiction—in most cases. Instead, Kiva channels money to micro-finance organizations that have already made the loans. I read about this outrage today in a story in the New York Times. The person who exposed the fiction, David Roodman, laid out his findings in a blog posting. A more charitable person might forgive Kiva.org for misrepresenting how its model works. But not me. Social enterprises should be held to an even higher standard than are for-profit businesses—not a lower one.

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Reader Comments

John

November 10, 2009 09:37 AM

Roodman's beef wasn't that Kiva hadn't been truthful, but rather that it hadn't been as transparent as possible about the logistics of the loans.

However, there was no "fiction" as you put it. Kiva has always been honest about the way that loans are disbursed.

If borrowers had to wait for months for loans to fund on Kiva, the whole enterprise simply would not work. That's why most loans are already funded when they appear on Kiva.

Even if there is "backstopping" in loan funding, the relationship between borrower and lender does become a direct one when the loan is repaid -- if the borrower doesn't repay, you don't get your money back. So please be satisfied that your connection to the borrower is indeed real.

sanjeev

November 12, 2009 04:23 PM

The facts are clearly loose in your own mind. Kiva had, the whole time, made clear on it's site that it worked with MFIs and that the people on the site did actually get the loans. Even more, they have listed the disbursal date for over a year now. Quit jumping on a bandwagon of criticism until you understand the issue. It is too easy to be a lazy blogger trying to get attention.

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