This week, we distill insights around Kiva Zip - a true person-to-person micro-lending platform which enables people to lend directly to entrepreneurs in the U.S. and Kenya without a middleman. 100+ thinkers and planners within MSLGROUP share and discuss inspiring projects on social data, crowdsourcing, storytelling and citizenship on the MSLGROUP Insights Network. Every week, we pick up one project and do a deep dive into conversations around it -- on the MSLGROUP Insights Network itself but also on the broader social web -- to distill insights and foresights. We share these insights with you on our People’s Insights blog and compile the best insights from the network and the blog in the People’s Insights Quarterly Magazine, as a showcase of our capabilities. We have further synthesized the insights to provide foresights for business leaders and changemakers — in the ten-part People’s Insights annual report titled Now & Next: Ten Frontiers for the Future of Engagement, now available as a Kindle eBook. For more, see: http://peopleslab.mslgroup.com/future-of-engagement

1. crowdsourcing | storytelling | citizenship | social data
Kiva Zip
People’s Insights Volume 2, Issue 22

2. Volume 2, Issue 22,
April - June, 2013
Future of
Money
Kiva Zip
100+ thinkers and planners within
MSLGROUP share and discuss inspiring
projects on social data, crowdsourcing,
storytelling and citizenship on the
MSLGROUP Insights Network. Every
week, we pick up one project and curate
the conversations around it — on the
MSLGROUP Insights Network itself but
also on the broader social web — into
a weekly insights report. Every quarter,
we compile these insights, along with
original research and insights from the
MSLGROUP global network, into the
People’s Insights Quarterly Magazine.
We have synthesized the insights from
our year-long endeavor throughout 2012
to provide foresights for business leaders
and changemakers — in the ten-part
People’s Insights Annual Report titled
Now & Next: Ten Frontiers for the Future
of Engagement.
People’s Insights
In 2013, we continue to track inspiring
projects at the intersection of social
data, crowdsourcing, storytelling and
citizenship.
Do subscribe to receive our weekly
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3. 3
What is Kiva Zip?
Founded in 2011, Kiva Zip is a true person-to-person micro-lending platform which enables
people to lend directly to entrepreneurs in the U.S. and Kenya without a middleman.
Entrepreneurs share their business ideas online and lenders can directly contribute to the
amount they need.
Like Kiva, Kiva Zip does not charge any fees, and service provider PayPal waives its fees.
Because there is no middleman, borrowers receive loans at 0% interest.
Source: fastcoexist.com
Kiva Zip is still in alpha, but is a good
indication of where charitable lending is
going: from indirect P2P to direct P2P and
from supporting overseas borrowers to
supporting local and foreign entrepreneurs.
Source: zip.kiva.org
Background: How Kiva works
Founded in 2005, Kiva was the first online
platform to indirectly connect lenders
with borrowers in developing countries,
via its extensive network of field partners
(microfinance institutions, social businesses,
schools and non profits). Field partners
approve borrowers, collect their photos and
stories and share this with Kiva volunteers,
who translate and upload these to Kiva.org.

4. Volume 2, Issue 22,
April - June, 2013
Future of
Money
Kiva Zip
Source: kiva.org/lend
Source: How Kiva Works
Blogger David Roodman pointed out the
importance of these stories:
“People donate in part because it makes them
feel good. Giving the beneficiary a face and
constructing a story for her in which the donor
helps write the next chapter opens purses.”
Lenders browse through borrower profiles,
by location and type of loan (educational,
personal etc), pick a borrower to lend to and
transfer money to Kiva using PayPal. Kiva
aggregates the micro loans and distributes
money to its field partners who in turn lend
it to the next set of borrowers. Over time,
borrowers pay back the field partners who
return the capital to Kiva, which in turn
returns the loan to lenders as Kiva Credits.
Lenders can choose to withdraw their money,
or fund another loan.
Several lenders have reported the process
can be addictive. Luz Iglesia reflected:
“You can link Kiva to your social network, so
you can celebrate with your friends – like Greg
and Lindsay and Pearl – when they make a
new loan or get a repayment. You can be on
a lending team, like we are at the Ian Martin
Group, and work together to increase your pool
of loans. You can recruit friends with “free”
loans so that they can try it out (the loans are
funded by angel donors). And if you’re nerdy
like me, you can track your Kiva metrics against
the averages of other users.”
While Kiva does not charge any money
from these transactions, Field Partners
charge interest fees to cover their costs and
safeguard against defaulters. Kiva covers its
operation costs through grants, donations
and discounted services from corporations
and foundations.
To date, Kiva has enabled 951,000 people to
lend $449 million to 1 million borrowers in
69 countries.
From Kiva to Kiva Zip: Demand
for a true P2P Network
The design of Kiva.org makes it seem like
loans go directly to the borrowers that

5. 5
Source: sfweekly.com, kiva.org/team/kacl and gopetition.com
lenders have picked. This is not so. Borrowers
actually receive the loan before their profile
is uploaded to Kiva.org – the money lent
“backfills” all the loans – a fact that not many
lenders were initially aware of.
In a comprehensive post on this topic, micro-
finance specialist David Roodman explains
why Kiva follows this process:
“What Kiva does behind the scenes is what
it should do. Imagine if Kiva actually worked
the way people think it does. Phong Mut
approaches a MAXIMA loan officer and clears
all the approval hurdles, making the case that
she has a good plan for the loan, has good
references, etc.”
“The MAXIMA officer says, ‘I think you deserve
a loan, and MAXIMA has the capital to make
it. But instead of giving you one, I’m going to
take your picture, write down your story, get
it translated and posted on an American web
site, and then we’ll see over the next month
whether the Americans think you should get a
loan. Check back with me from time to time.”
Lender Monika Jankun-Kelly commented:
“I find it very troubling that Kiva *needs* to
rely on mythology and oversimplification to
draw in lenders, yet that’s the way it is. Human
nature is what it is, our society is what it is. Let’s
improve those, and Kiva’s advertising methods
will follow suit.”
However, many lenders were unhappy when
they understood the process. Some shared
their discomfort through their blogs and
videos.
Source: The Truth About How Kiva Works
Others were unhappy that they money was
going to causes they did not support, like a
loan to support a cockfighting business in
Peru (legal in Peru but illegal in California).
Yet others were unhappy with the heavy
interest rates charged by the middlemen,
especially when other platforms, like Zidisha,
had found a way to connect people directly at
significantly lower interest rates.
Lender melliecarma commented:
“after 106 microloans to kiva borrowers in two
years time i came to a similar conclusion and
invest on zidisha.org now as i’m fed up with
micro finance institutions getting in the way
between lenders + borrowers.”
Some, like pss1, justified the need for interest
rates:
That “middleman” fee covers the cost of
making the loan and working on the KIVA
platform. As described above, they are paying
people (and a relatively high local wage) to
vet the clients to eliminate scammers, take
pictures, write the client stories, and put them
on the internet. Interest rates are much lower
than the typical local “money lender” rates.
To address the concerns of lenders, Kiva
introduced many design changes to Kiva.org
and introduced Kiva Zip.
How Kiva Zip works
The Kiva Zip platform is similar in design
and concept to crowdfunding platforms
(like Kickstarter). Instead of facilitating
loans to anyone in need, Kiva Zip focuses on
entrepreneurs in the U.S. and Kenya.
The Kiva Zip website says:
“Now, Kiva Zip will enable lenders in the
United States to make loans more directly to

6. Volume 2, Issue 22,
April - June, 2013
Future of
Money
Kiva Zip
Source: huffingtonpost.com
borrowers. Instead of working with a local
partner on the ground to facilitate your loan,
we’re sending your funds to the borrower
electronically (e.g. using mobile and electronic
payment methods). This increased efficiency
allows for 0% loans to the borrower, but a
greater risk for the lender.”
(Emphasis in original)
Blogger Dave Algoso wrote:
“Kiva [Zip] is using mobile and other
technology to offer very low cost loans to
borrowers who don’t even have access to
normal microfinance institutions. Pilot
borrowers for the new system are in the United
States and Kenya, because of M-PESA. In
place of local microlending partners, Kiva Zip
uses “trustees” who vouch for the borrowers
but never handle any money.”
Trustees and borrowers must both submit
an application online to be considered for a
loan. Once the loan is approved, it is posted
on Kiva Zip and must be funded within 90
days. If the loan is not fully funded, the
money is returned to the lenders. On Kiva
Zip, the minimum loan amount is $5.
This new model adds even more importance
to the reputation and social presence of
borrowers and even the trustees. Borrowers
need to rely on their networks to recruit
support. Trustees need to rely on their
reputation to increase the borrower’s chances
of getting loans.
Fast Co Exists’s Alex Goldmark points out
that Kiva Zip makes loans available to people
who may not qualify for bank loans, and
stresses the importance of distributed risk
and trust:
“The average Kiva lender puts up $25, not
a disaster if it vanishes. That helps increase
the risk tolerance for users. And the average
loan size is just $250 to Kenyan borrowers
and $4,000 in the U.S. The small scale keeps
defaults from devastating any one lender’s
assets. But nobody likes to lose their money. So
the trust network remains an important, if still
experimental, aspect.”
In addition to endorsing borrowers, trustees
also help identify local businesses and
entrepreneurs who could benefit from Kiva
Zip. Here’s the role Kiva Zip Trustee AEDC
will play:
“AEDC is partnering with the Alaska Small
Business Development Center (SBDC) to
identify Alaska businesses that would benefit
from the Kiva funding model. As a trustee to
Kiva Zip, AEDC will play a crucial role in the
program by recommending borrowers for
the Kiva Zip loan and ensuring they meet the
criteria for the program. In addition, AEDC
and SBDC will provide borrowers with ongoing
support and business coaching.”
The Kiva Zip model ensures that borrowers
receive financial support and also
community support. Trustees and lenders
can offer business advice and feedback,
and promotional support to help them
successfully fund their loan. They may also
become customers of the new businesses
they helped set up!

7. 7
Source: pandodaily.com
Pushing the barriers of micro-
lending
In addition to connecting lenders and
borrowers directly and creating a local
support system for borrowers, Kiva Zip is also
exploring partnerships to help borrowers
succeed in their businesses.
Source: zidisha.org
Pando Daily’s Carmel Deamicis reports on
Kiva’s new partnership with startup Zaarly:
“Kiva is giving micro loans to a handful
of Zaarly’s storefront owners that need a
loan to take the next step in growing their
businesses. In exchange, Zaarly will provide
online storefronts and resources for a few Kiva
borrowers.”
Other approaches to P2P lending
We are seeing several types of P2P lending
platforms in the social good space. Zidisha
connects lenders and borrowers directly, and
allows lenders to decide the interest rate.
Vittana (video) focuses on borrowers who
need educational loans. United Prosperity
uses micro-loans to guarantee borrower’s
bank loans, helping them qualify for larger
loans and build credit history. LendwithCare
(video) connects lenders and borrowers
through microfinance institutes vetted by
CARE International.

8. People’s Lab is MSLGROUP’s proprietary
crowdsourcing platform and approach that
helps organizations tap into people’s insights for
innovation, storytelling and change.
The People’s Lab crowdsourcing platform
helps organizations build and nurture public
or private, web or mobile, hosted or white
label communities around four pre-configured
application areas: Expertise Request Network,
Innovation Challenge Network, Research &
Insights Network and Contest & Activation
Network. Our community and gaming features
encourage people to share rich content, vote/
comment on other people’s content and
collaborate to find innovative solutions.
The People’s Lab crowdsourcing platform
and approach forms the core of our distinctive
insights and foresight approach, which consists
of four elements: organic conversation analysis,
MSLGROUP’s own insight communities, client-
specific insights communities, and ethnographic
deep dives into these communities. The People’s
Insights Quarterly Magazines showcase our
capability in crowdsourcing and analyzing
insights from conversations and communities.
People’s Lab:
Crowdsourcing Innovation & Insights
Learn more about us at:
peopleslab.mslgroup.com | twitter.com/peopleslab

9. For People’s Lab solutions, contact
pascal.beucler@mslgroup.com