Kiva Confusion
by Jeanette Thomas: Monday, November 9, 2009
The New York Times just picked up on the buzz caused by David Roodman’s blog post pointing out that Kiva doesn’t lend directly to poor borrowers. Likening the revelation for many individual lenders to the scandal in the 1990s when many child sponsorship organizations amended their disclosures after the Chicago Tribune revealed that the money they were raising was not necessarily going to the specific child whom the marketing efforts implied was being reached, the article points out that Kiva has already amended the language on its Home page. It no longer promises: “Kiva lets you lend to a specific entrepreneur, empowering them to lift themselves out of poverty”. Instead it more accurately describes its role as: “Kiva connects people through lending to alleviate poverty.”
As Deb Burand has pointed out, the lending model also has implications for microfinance institutions. Deb highlighted the issues MFIs should consider when engaging with online lenders in a paper published by CGAP last year.
