Kiva: Using Crowd Sourcing to Serve the Underbanked

I chose to support non-profit micro lender Kiva by participating in a syndicated loan. The recipient, Milka, is a Kenyan corn farmer and mother of four who was looking to expand her farming operation buy purchasing hybrid seed corn, fertilizer and a solar lamp. There are two primary reasons I chose this effort.

I thinking giving people money directly is one of the most effective means of eradicating poverty. I am inclined to believe that people generally know what is best for themselves. International aid is riddle with horror stories of privileged westerner experts coming in to help armed with expensive college degrees and ideas of how to better the life of others Classic examples are of NGOs displacing local business with ‘free’ donations, or teaching expensive ‘best practices’ for farming and retail that instead drive locals into ruin. While equipped with good intentions, they lack any skin in the game and do not bear the consequences of their actions. Kiva address both of these issues. A loan empowers individuals to build their own lives. Unlike a gift, it gives the individual personal dignity and agency. Unlike many NGOs, Kiva treats them as adults! As a nonprofit, Kiva is bypassing traditional regulatory barriers that make it too prohibit expensive to provide financial services that the rest of us just expect. Additionally, its an institution that intends to stay and continue to serve under banked communities around the world. Myself and Kiva are risking our own money and capital so that we bear some element of the risk of the recipient. In my view, this is a more ethical route than many traditional alternatives. 

The second reason is my comparative advantage is that I have money. I am much better at making money than helping farmers in Africa increase their crop yields or treating diseases, or even teaching English. While I may have a more visceral connection traveling to that Kenyan village and doing aid work, I will have a much larger impact working in the US and writing a check. I think it is important that we remain cognizant that virtue signaling at the expense of maximizing the welfare of others is self serving, not altruism. Just because something makes me feel good and that I am making an ‘impact’ on the world does not mean that is the most effective means of alleviating poverty. To combat this, Kiva provides extensive descriptions and pictures of who they are helping and what impact that will have on their life. Reading through the profiles alone was a powerful and moving experience. This strategy is effective in creating connections between people across the world. Without Kiva Milka would be an abstract concept that I would almost never pay attention to. Through the wonders of PayPal and modern financial underwriting technology I was quickly converted from thinking about doing this for a school project to a participant.

Kiva is a great example of how crowd sourcing leveraging the internet and mobile revolution can really improve the quality of foreign aid. They make it exceedingly easy to get started, and I can easily see myself spending more time and money on the platform.  






One response to “Kiva: Using Crowd Sourcing to Serve the Underbanked”

  1. First, I have to say, as the professor of this course, that I of course did not ask you to participate in a syndicated loan to support non-profit microlender Kiva. That was your choice. But it’s clear that you have reflected on your decision. This is the only example of crowdsourcing that we have encountered so far today that directly relates to money. But it does bring our attention back to the fact that crowdsourcing does not mean that a certain project does not have expenses. I’m left pondering the differences and similarities between more scholarly crowdsourcing and supporting microlending and other financial initiatives.