The Kiva Story

Last week, I attended the Penn Microfinance Conference.

One of the presenters was Matt Flannery, who is the co-founder and CEO of Kiva, which is an online platform that facilitates microlending to the Third World.  In fact, he talked about the humble beginnings of Kiva.

The idea got its start back in late 2004.  Matt and his wife - Jessica - took a three-month trip to East Africa.  While she wanted to get involved in microfinance, Matt was more interested in putting together a tech startup.

So why not compromise and combine the two things? 

At first, Kiva was mostly a side project, as Matt coded the platform while he was a programmer at Tivo.  But seeing the huge potential, he decided to devote his full-time efforts to Kiva.

By March, there were seven loans on Kiva (for a total of $3,500).  Within six months, the first loan was paid off.

Despite this, there was much skepticism.  "We visited VCs, but they weren't interested," said Matt.  "The feeling was that it would not scale and was perhaps even illegal."

Well, Matt talked to some lawyers and even the SEC.  From what he could tell, he was OK on the legal front.

But, would people be interested?

That's where the power of the media made its impact.  At first, there were a variety of bloggers that promoted Kiva.  Next, the site got a profile on PBS's Frontline.  And then, the mighty Oprah highlighted Kiva.

"It was publicity that funded our efforts," said Matt. 

Right now, there are more than 250,000 lenders on the site.  What's more, Kiva is still thinking big; that is, over the next five years, it wants to fund $1 billion in loans and attract ten million lenders.