July 07, 2009
Adding U.S. Entrepreneurs to Kiva Proves Controversial
Kiva.org’s recent addition of entrepreneurs from the United States has spurred spirited –- and sometimes rancorous –- debate among people who make loans through the Web site.
The San Francisco charity has been enormously successful matching entrepreneurs in developing countries with people who want to lend them money. Since its founding in 2005, visitors to the group’s Web site have made loans totaling more than $75-million.
Last month, Kiva began testing the idea of also including U.S. entrepreneurs –- a decision that does not sit well with Tom Behan, a Seattle man who has started a group on the site called Unhappy Kiva Lenders.
“Kiva’s stated mission is to ‘alleviate poverty,’” Mr. Behan wrote on the group’s page on the Kiva site. “Poverty is defined as: ‘the state of having little or no money and few or no material possessions’. Does that sound more like the situation for US Kiva borrowers or borrowers from the third world countries?”
Mr. Behan is calling on fellow lenders to join him in refusing to make loans to U.S. entrepreneurs, and asks Kiva to stop including American entrepreneurs on the site. So far, more than 420 people on the Web site have joined the group.
Of the 1,600 people who have voted in an online poll, 48 percent of respondents –- 779 votes –- said they agreed with the decision to add loan requests from the United States, compared with 43 percent –- 695 votes –- who said they did not. Roughly ten percent of the respondents –- 158 votes –- said they weren’t sure.
Comments made by people who voted in the poll and on Kiva Friends, an online forum for lenders, reflect a wide range of opinion:
“Each loan to a U.S. person could be used for several people in less developed countries to do much more with. Poor people in the U.S. with the stability to pass the partner loan requirements aren’t actually poor.”
“I am amazed that people are upset about loans in the U.S. — if a person doesn’t want to loan in the U.S., they shouldn’t. But it’s obnoxious that a person would want to prevent someone else from doing so by trying to stop Kiva from making the option available. How incredibly offensive that one person thinks they have the right to impose their own personal belief system upon another.”
“‘Needing’ $6,000 dollars to develop a Web site for your business idea is a world away from ‘needing’ $600 to buy two goats to raise so that you might feed your family.”
“At this time I am not planning on lending to first-world countries but it is nice the option exists. If opening first-world countries like the USA brings more working capital to Kiva and does not reduce the amount to third-world countries, this would be perfect.”
Officials at Kiva say that they expected the decision to be controversial.
“The interesting thing is that we’ve had for years people upset with us because we haven’t been in the U.S.,” says Fiona Ramsey, a spokeswoman for the organization. “There are a lot of people who want to help in their own backyards.”
Kiva has invited both supporters and opponents of the decision to talk about their opinions on the organization’s monthly community conference call on July 15.
Ms. Ramsey says the organization is listening carefully to lender feedback, which it will consider when it decides whether to permanently add American entrepreneurs to the site, a decision that she says is likely to influence Kiva’s expansion.
“How this plays out will play a very strong role into whether or not we do add other developed countries,” says Ms. Ramsey.
What do you think about Kiva’s decision?
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its a great situation for kiva to be in i think, and raises several points in my mind:
- first, that were having this spirited public debate about poverty. some see it as a fixed definition, and others as a context-specific condition. – second, were seeing people have more choices about where to lend, and how. as a result, the limits of “lending as philanthropy” are being stretched. this is good from a market perspective: for kiva, those competing with kiva, and borrowers themselves. – At the end of the day, it will force lenders to better understand the impact they’re having in concrete terms, to think critically about whether they are, in fact, helping to “lift” people out of poverty, or ameliorating its effect for some period of time.
There are lots of other issues, but I’m glad Kiva has had the courage to push this debate forward. The reality is that poverty exists in the United States. The degree to which US entrepreneurs experience it the same way as entrepreneurs outside the US is an open question that can’t be answered by external assessment alone. At the end of the day, the “movement out of poverty” is as much about mindset and opportunity as it is about an accumulation of (or lack thereof) material goods.
— lhtorres Jul 8, 11:23 AM #
From a fundraiser’s and donor’s perspective, I think Kiva’s decision to open lending to US enterpreneurs shows that they value the commitment of their lenders and want to offer them more options. If a lender would rather assist someone in the US than in another country, why deny them the opportunity?
— Elizabeth Clawson Jul 8, 12:36 PM #
Kiva is a wonderful organization. Their focus on opening up to the United States is helpful and with a good motive of serving our own people.
I’d rather people spend their time on supporting causes, than fighting on whether Kiva should go domestic or not.
What’s a better use of our time? Should we fight Kiva’s and Grameen’s added domestic focus? My vote is that we spend our time, money and energy on giving loans or donating — whether in the U.S. or abroad.
Pamela Hawley
Founder and CEO
UniversalGiving
http://www.universalgiving.org
Living and Giving Blog http://pamelahawley.wordpress.com
— Pamela Hawley Jul 8, 06:04 PM #
As the CEO of one of Kiva’s US field partners, I am obviously not unbiased. I think it would be a tragedy if anyone using Kiva reduced their lending to borrowers in developing countries in order to fund US loans. I don’t believe that will happen, however. Our hope is that the US option will draw new users to the site, and that the Kiva platform can have a positive impact in helping to build wealth for lower-income Americans, while continuing to provide increasing amounts of capital to MFI’s overseas.
Eric Weaver, CEO
Opportunity Fund
— Eric Weaver Jul 9, 04:52 PM #
Agreed with lhtorre that this opens up the debate on poverty, which is very positive.
Kiva is based on Yunus’ Grameen Bank, which has two (?) U.S. branches to fund American entrepreneurs, focusing still on women. This was an important move for Grameen. From what I saw, public reaction to this was positive. Perhaps the difference lies in the way that Kiva engages its lenders.
Olivia Kuhn-Lloyd
CauseCapitalism.com
— Olivia Kuhn-Lloyd Jul 10, 01:24 PM #