In the summer of 2009, 5 years after starting work as a management consultant in London, I decided to take a break from strategizing with large multinational organisations in the city, in exchange for a placement ‘on the ground’ in sub-Saharan Africa with a young, but highly-acclaimed Bay Area start-up. When I first heard about Kiva in 2007, I was immediately attracted by its emphasis on personal connections and the importance it places on ensuring the transparency of microloan payments. Set up as a peer-to-peer lending site, Kiva allows internet users to lend as little as $25 to a micro-entrepreneur of their choice for a specific business opportunity that is outlined on the website. Having successfully lent money to a number of clients myself, I was interested in the opportunity to find out more about Kiva’s investment model and to see for myself whether microfinance really could work and, if it could, under what conditions.
After a week of training in San Francisco, I left for West Africa to work with one of Kiva’s original field partners, based just outside of Dakar in Senegal, as part of the Kiva Fellows programme. While there, my roles included verifying the identity of clients featured on the website, providing support to implement new Kiva policies and gathering stories on the success (or otherwise) of loan clients’ businesses in order to provide progress reports to Kiva’s avid and rapidly-growing lender base. As it happened, I arrived at a time of great flux at the MFI and was able to help with designing new risk management processes and information systems within the organization that would help the new director with his duties. As an established partner of Kiva, the MFI benefited from a reminder of Kiva’s policies and assistance with eliminating some of the ‘bad habits’ into which it had slipped. For Kiva, having a set of eyes and ears on the ground for 4-6 months represented an invaluable way to promote its dedication to full transparency and to protect its online reputation.
It has been said many times before that entrepreneurship does not come naturally to everybody and my experience in Senegal definitely brought that home to me. In many villages, entire groups of women sold similar products (watermelons, peanuts, smoked fish…) in a local market with limited demand due to risk adversity, a lack of training and a shortage of alternative ideas. While the scope of my duties in Senegal stopped short of providing microentrepreneurs with advice on their business strategies, I was able to speak with loan officers and the director about the possibility of giving training similar to that offered by other MFIs and to offer suggestions on content including financial literacy and business management. I hope that at some point in the future more efforts will be made to implement this in a cost effective manner and to give loan clients the additional support that is needed.
Working in microfinance at a time when the sector and Kiva were attracting a significant volume of bad press, I was curious to speak to clients directly about their reasons for taking a loan and the outcomes of their investment. I was encouraged to meet clients for whom a small injection of capital had contributed to the growth of a bike rental shop or to a fisherman’s flourishing wholesale activities, but less buoyant to hear the many accounts of crop failure, economic slowdown and illness that caused other groups to fall behind with their repayments. What resonated with me most as a business consultant and as a Kiva Fellow, was the positive and encouraging response that I received from many Kiva lenders, irrespective of the outcome of the business. The Kiva vision has been to establish personal connections between micro-level ‘social investors’ and clients who, in many cases, have been included into the financial markets for the very first time. I appreciate the opportunity I was given to witness, and share stories about the successes and failures of microfinance and believe that it is through this type of information sharing that social investors can make the best decisions about how and where to use their money.