Kiva Case Study
U.C.!Berkeley!–!Haas!School!of!Business,!Independent!Study!
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Kiva!Case!Study!
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Sarah!Anderson!
Joel!Ramirez!
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December!6,!2007
1
Introduction!
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It!was!a!beautiful!morning!in!November!2007!when!Jessica!and!Matt!Flannery,!the! founders!of!Kiva.org,!walked!into!their!San!Francisco!office!to!greet!the!rest!their!ever" growing!team.!!Kiva.org!(Kiva),!the!world’s!first!person"to"person!micro"lending!website! had!seen!incredible!growth!over!the!past!year.!!Media!exposure!such!as!an!appearance! on!the!Oprah!Winfrey!Show!and!a!mention!in!Bill!Clinton’s!book,!Giving,!resulted!in!an! enormous!number!of!lenders!coming!to!the!Kiva!website!in!hopes!of!lending!money!to! entrepreneurs!in!the!developing!world.!!!
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In!2005,!Kiva!introduced!microfinance!to!the!internet,!and!since!then,!has!created!a! global!community!of!people!connected!through!lending.!!By!partnering!with! microfinance!institutions!in!over!30!countries,!Kiva!has!given!small!businesses!in! developing!countries!the!opportunity!to!grow!and!thrive.!!The!company’s!microfinance! partners!post!profiles!of!loan!applicants!on!the!website,!where!anyone!with!a!credit! card!and!an!internet!connection!in!United!States,!Canada,!Europe!and!beyond,!can! provide!small!loans!to!the!businesses!of!their!choice!(See!Exhibit!1!for!a!sample!profile).!
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As!of!that!November!morning,!Kiva!lenders!have!funded!over!$14.5!million!to!over!
22,000!entrepreneurs!through!65!microfinance!partners!in!37!countries.!!The!team!was!
meeting!to!discuss!the!upcoming!board!meeting!and!the!strategy!for!Kiva!in!the!coming! year.!!Though!the!meeting!was!filled!with!satisfaction!and!pride!in!what!the!team!had! accomplished!since!their!inception,!major!decision!needed!to!be!made!and!debates! ensued.!!While!their!growth!was!astonishing!and!exciting,!it!was!also!difficult!to!manage.!! Furthermore,!loans!on!Kiva!were!still!not!interest"bearing.!!Matt!had!always!dreamed!of!
!
!
!
!
!
!
!
Kiva!Case!Study!
!
Sarah!Anderson!
Joel!Ramirez!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
!
December!6,!2007
1
Introduction!
!
It!was!a!beautiful!morning!in!November!2007!when!Jessica!and!Matt!Flannery,!the! founders!of!Kiva.org,!walked!into!their!San!Francisco!office!to!greet!the!rest!their!ever" growing!team.!!Kiva.org!(Kiva),!the!world’s!first!person"to"person!micro"lending!website! had!seen!incredible!growth!over!the!past!year.!!Media!exposure!such!as!an!appearance! on!the!Oprah!Winfrey!Show!and!a!mention!in!Bill!Clinton’s!book,!Giving,!resulted!in!an! enormous!number!of!lenders!coming!to!the!Kiva!website!in!hopes!of!lending!money!to! entrepreneurs!in!the!developing!world.!!!
!
In!2005,!Kiva!introduced!microfinance!to!the!internet,!and!since!then,!has!created!a! global!community!of!people!connected!through!lending.!!By!partnering!with! microfinance!institutions!in!over!30!countries,!Kiva!has!given!small!businesses!in! developing!countries!the!opportunity!to!grow!and!thrive.!!The!company’s!microfinance! partners!post!profiles!of!loan!applicants!on!the!website,!where!anyone!with!a!credit! card!and!an!internet!connection!in!United!States,!Canada,!Europe!and!beyond,!can! provide!small!loans!to!the!businesses!of!their!choice!(See!Exhibit!1!for!a!sample!profile).!
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As!of!that!November!morning,!Kiva!lenders!have!funded!over!$14.5!million!to!over!
22,000!entrepreneurs!through!65!microfinance!partners!in!37!countries.!!The!team!was!
meeting!to!discuss!the!upcoming!board!meeting!and!the!strategy!for!Kiva!in!the!coming! year.!!Though!the!meeting!was!filled!with!satisfaction!and!pride!in!what!the!team!had! accomplished!since!their!inception,!major!decision!needed!to!be!made!and!debates! ensued.!!While!their!growth!was!astonishing!and!exciting,!it!was!also!difficult!to!manage.!! Furthermore,!loans!on!Kiva!were!still!not!interest"bearing.!!Matt!had!always!dreamed!of!