A chat with Chris from KivaStore

There are a few stores online that are raising money to support Kiva (you can find a partial list here). The best and most impressive of them is KivaStore, run by Chris. We’re thrilled to have a chat with him about the store, Kiva etc.

For those who may not know you, could you please introduce yourself?

Hi, I’m Chris, and I’m a lender!
Also, I run KivaStore, a site that sells products to promote Kiva. I take care of it top-to-bottom: inventory, fulfillment, web, and customer service.

How long has Kiva Store been active?
KivaStore has been around since 2006. I had found out about Kiva from a blurb in BusinessWeek. I was skeptical at first, but with an academic background in IT and economics, I couldn’t ignore it! So I became a lender and was thrilled to see repayments coming back to me. I also really liked that the lender designates how much money goes toward the loan and how much goes toward Kiva, unlike other nonprofit organizations. It was because of this aspect that I volunteered to sell wristbands. I had sold t-shirts online during college, so I felt that my online sales skill could use to benefit Kiva itself.

Is Kiva Store a side project for you? Do all the profits go to Kiva?
Yes, KivaStore is a side project for me. All the profit eventually makes its way back to Kiva. But a lot of profit is also reinvested in buying inventory and launching new products. Our primary goal is promotion, with profit being a secondary goal.

Is Kiva involved in approving the products? What support does Kiva give you?
I come up with most product ideas, and then run them by Kiva. There has never been an issue where an idea was shot down, but if a product contains more text than just the Kiva logo, it needs to be reviewed. The calendar for instance gets extensively reviewed before it goes to press. Within the past year, Kiva has pitched their own product ideas; those being the iPhone 5 case
and the Kiva greeting cards. Their staff is larger now than it was at our start, and they now have some time to promote promotions! This support includes spreading KivaStore links via the website, Facebook, and Twitter, along with the more substantial work of rendering the art for the iPhone case.

Which products are the most popular?
Seasonally, the calendar is a popular item. The piggy bank and wristband definitely take the crown for the whole year though. Particularly the piggy bank, since it’s representative of Kiva, and practical too!

Could you give us an idea of how many piggy banks have sold, and who buys them?
There are well over 2000 piggies roaming out in the wild now. They live all over the world: US, Canada, Australia, Norway, Germany, Japan…. twice we’ve sent out large herds of piggies (100+) to companies who use them as giveaways to their clients. Receiving an order for two piggies is great, but having socially-aware businesses help us do distribution really helps spread the message about Kiva.

Are there any plans to add personalized products to the store? For example, a postcard with my loans (say a map of all my loans, as a lender – or that of a team)?
Yes, with the Kiva developer API, it’s possible to easily extract lender information. I’m experimenting with borrower photos with a text overlay with the details. The concept is that you’d pick borrower photos from your portfolio and have them delivered to you from a photo site such as Snapfish. You can see here some prototypes on my fridge featuring borrowers from my own portfolio. (see photo on the left) It seems like the type of product that someone might pin in their office, and would make a great conversation starter. And hopefully those conversations will end with new lenders!

Apart from donations while lending, what other ways do you think Kiva can raise funds?
Apart from soliciting donations while lending, there are several ways that Kiva already makes money. These include large grants from foundations and corporations, interest on the float (lender balances waiting to be relent), honorariums from speaking engagements, and, presumably, that Best Buy commercial Jessica was in last year. There is a lot they could do to raise more money, such as doing some corporate education based on their knowledge of the developing world, or branching into feed-based P2P lending in the developed world. Overall though, I feel that Kiva’s current path is sound, as it does cover their expenses but doesn’t distract from the primary activity, which is lending.

Apart from shopping products, what help do you need from us lenders?
As a store, of course buying products has the most impact. But tweeting about your purchase afterward helps too! We find we have a lot of customers who — although they are longtime lenders — didn’t know that KivaStore existed. So promoting KivaStore is another way to help promote Kiva. We also sometimes field product ideas from lenders; the geocoin is an excellent example of
that. Most suggestions don’t pan out, but that one has done quite well, and is a really unique way to spread the word about Kiva.

Thank you Chris, for your time. We really appreciate it.

Lenders and Captains – please feel free to promote the store in your teams. I’ve bought geocoins and wristbands from Chris and they are awesome

Interview with Ali Price, co-founder of Lydali

For those who may not know you, could you please introduce yourself?

I’m Ali Price, the former Community Marketing Manager at Kiva, and I left Kiva last month to focus full-time on Lydali, a company I co-founded earlier this year. I live in San Francisco with my husband, Jonny, who also works at Kiva running Kiva Zip.

Lydali is about bringing together beautiful artisan-made products from all over the world. Right now, we exist as an online store, showcasing products from global designers and artisans, and telling their stories about their lives, work, and traditions that inspire them. We’re working on building a personal shopping experience that allows you to learn about the people who made the products you’re buying.

I actually started thinking seriously about Lydali on a Kiva trip to Bali. I spent some time with my friend Cissy DeLuca, who worked as Kiva’s Field Support Specialist in Asia and was based out of Bali. Cissy had started employing artisans there to make beautiful jewelry and accessories, and they were able to work flexible hours making jewelry and clutches. It was a really cool story and the products were great, but they were having trouble getting the word out and selling to more than just family and friends. I had worked with artisans in Kenya before coming to Kiva, also, and I had experienced some of the same issues I saw Cissy facing.

The challenges Cissy talked about were so familiar, and I was certain that she and I weren’t the only ones who had experienced this while working with artisans. I thought about it quite a bit on the way home from Indonesia, and when I got back, I spoke to my friend Lydia Harter, who works as a buyer for a large home furnishings retailer. Together, we started thinking about different retailers selling global goods. There were lots of fair trade stores that had some nice products, but many of the things they sold were more about the story of empowerment rather than about the product quality and design. And on the other end of the spectrum, there were stores selling beautiful globally inspired products that were actually made in factories in China.

We decided to launch Lydali as a store focused on aesthetics and design, but also on artisan empowerment and storytelling. We got started working on it in our spare time in January 2012, and we launched our website, www.lydali.com, in April. It’s been exciting to see its growth over our first few months, and we’re really looking forward to seeing where it goes as we continue to gain traction.

There were a lot of challenges, but one of the biggest was finding time to get all the zillions of things done that we had to get done while both working full-time. Lydia and I would carve out hours in the mornings and evenings to work, and basically every weekend was spent doing some big project for Lydali. We were really excited about what we were working on, so even though it meant shutting down on the rest of life for a few months, we were able to do it.

Now, our two biggest challenges are spreading the word to bring in new customers, and finding artisans and suppliers to partner with around the world. We welcome any suggestions on how to do either of those things better. If you have ideas, you can email me at ali@lydali.com.

Lydali is for-profit, by design. We wanted to be able to operate like a business, but remain ethically-minded.

Lydali is carefully curated – we hand-pick every product that we decide to sell. Etsy is more of an open marketplace in which anyone can create a storefront, and each of the individual sellers is promoting his/her own work. We’re also working to tell stories behind each piece we sell and its maker to clearly show customers who they’re supporting with their purchase, which is something that I haven’t seen many other craft shops do or do well.

Not yet, but I hope there will be soon. We’ve tried working with some fellows to approach artisans they meet, but we have had trouble getting in touch with borrowers directly and working with them to scale. Having Kiva borrowers on Lydali would be a dream, though, so we’re continuing to work on it.

I actually haven’t traveled at all yet! My co-founder, Lydia, just got back from Turkey, and she is about to post about her trip on our blog. I’m going to Jordan in a week, so keep an eye out for stories and photos from that trip on Lydali’s blog soon.

We’re keeping our focus on artisans outside of the US at the moment, although we’ve been talking to a few refugee communities located in the US that we might work with soon. I think there are a lot of opportunities for artisans in the US to get their work seen and picked up at retailers, so we’ve decided to focus on artisans who might have a harder time with developing connections to a market.

So far, we have been buying goods from artisans and having them shipped here to San Francisco. Right now, we order from artisans in small batches, and shipping from some areas of the world we work with (South Africa, India, Guatemala, and others) takes a long time and is really expensive. It’s easier for us to order one big shipment than to ask artisans to ship each order as it comes in, and it also helps to guarantee that orders will go out on time.

In 3-5 years, I’d love to see Lydali working with hundreds of artisan cooperatives around the world, selling clothing, accessories, and home furnishings that appeal to men and women around the world. I’d love to see artisan communities around the world thriving because of the business they get from Lydali, and it would be awesome to see Lydali customers stopping by workshops to meet artisans in person while they’re traveling.

We’ll be doing a pop-up shop in San Francisco for the full month of January at Makeshift Society, and we’ve got a few more plans in the works. We’re not at a scale where we could bring artisans over yet, but hopefully we will be one day!

We’d love to do a pop-up in New York sometime next year, too, so we’ll be sure to keep you posted if we do.

This is tough for Kiva to do because of borrower privacy, but it’s something that they’re trying to do more of with Kiva Zip. I think Kiva definitely recognizes the power of connection and support that lenders want to provide small business owners, and I hope that there will be a way for them to map the different businesses you can support through giving them your business in addition to lending.

There actually just was one! The day after Black Friday was Small Business Saturday, although I don’t know how well it was publicized. I like to try to support small businesses in my area, but it’s much easier to buy from larger companies that have tons of marketing dollars and resources to get their products in front of you. You’ve got to be really intentional about supporting small business to avoid buying from big companies. I’ve started supporting lots of small businesses in the SF area after being introduced through Kiva Zip, and I like doing the same for businesses I’ve been introduced to through Kickstarter.

If you know of any artisans whose products you’d like to see on Lydali, please email me – ali@lydali.com. And we always appreciate you sharing Lydali with friends, so if you want to link to this post or share a link to Lydali, we really value you helping to getting the word out. Also, following us or posting about us on social media channels is always helpful. We’re on Twitter, Facebook, Pinterest, and Instagram.

Thank you Ali, for taking time to answer our questions.

PS:  Fun fact – Most people are aware of Paypal Mafia.  Did you know that there is also a Kiva Mafia? 

A short list of Microfinance organizations and their business models

Quick – how many Microfinance / P2P organizations can you name, other than Kiva? I could name just two (Zidisha and Vittana), until about a few days ago. Out of curiosity, I googled for organizations like Kiva.

Why learn about other organizations at all?
May be you want to learn about different Microfinance models, may be you want to earn interest on your loan, may be you want to support other organizations in addition to Kiva, may be you are just curious (like me) – whatever is the reason, it is an interesting exercise.  It also helps us to give better ideas to Kiva, picking the best ones from other organizations.

While reading through the article, you’ll notice one remarkable statistic about our beloved Kiva – it is simply that how big Kiva has grown, in such a short period of time.  Almost all organizations listed below seem tiny in front of Kiva.  I suppose Kiva is doing something (many things?) right.

I found a few organizations that I’ve listed below (in alphabetical order). Please feel free to let me know if I’ve missed any (either in the comments, or email Kivanewyork).  I’ll update this post with more organizations, as I come across them. If you have experience lending with these organizations (both good and bad) please feel free to share.

Celebrating 7 Great Years of Kiva with our New York Lending Team

Thank you to everyone that celebrated Kiva’s 7th birthday party with us on Saturday, October 20th at The Center Bar. Long-time and new lenders, Kiva fellows just recently returning to NYC, and other supporters caught up with one another.

Thank you to our sponsors for the event, who provided some great give-a-ways for our attendees:

Ahkun gave us t-shirts and clutches, GOOD magazine gave away a few copies of the magazine and Zidisha gave two copies of Julia’s Microfinance stories eBook

Here are some great photos from the event, courtesy of Marc Hall, also available on our Facebook page.

Huge thanks to Premal Shah for the video he made specifically for us, and Kiva staff (Hi Ali and Jason !!) for sending us the Kiva party in a box goodies

Interview with Julia Kurnia, founder/director of Microfinance organization Zidisha

There are quite a few Micro Finance organizations that are doing amazing work.  One of them is Zidisha.  I came to know of Zidisha, when someone posted a message about it in one of Kiva’s team message boards.  Zidisha is a lot similar to Kiva, with some differences.  They are small but growing fast.

Zidisha’s lending model is interesting – both lenders and borrowers can propose an interest rate.  Borrowers can specify the maximum interest rate they are willing to pay, and lenders can “bid” on the loans, specifying the interest rate they are looking for.  This is the major difference between Kiva and Zidisha.  Also, Zidisha does not have any intermediaries for distributing and collecting loans, so the interest rates are really low – it is similar to Kiva Zip.  A lender can get started with Zidisha with as little as a single dollar.

Julia Kurnia is the founder/director of Zidisha.  She kindly agreed to give us an interview about Zidisha.  She also has an ebook with stories of Zidisha borrowers.

Introduction:

Vijay: For those who may not know you, could you give a quick introduction?
Julia: Sure.  My name is Julia Kurnia and I am the founder of Zidisha Microfinance, the first P2P microlending service to connect lenders and borrowers directly across international borders.

What motivated you to start Zidisha?
The genesis of Zidisha goes back to 2006, when I was working with an early field partner of the microfinance fundraising platform Kiva.org.  Though the field partner tried to operate as efficiently as possible, the costs of managing a microlending program in the traditional staff-intensive way was always very high relative to the small size of the loans.  In order to cover these costs, Kiva field partners such as the organization I worked with must charge very high interest rates, of 35% or more on average.  As a result, borrowers pay exorbitant interest rates for loans funded at 0% interest by Kiva lenders.

As the internet has become ever cheaper and more accessible in developing countries, an increasing number of microfinance borrowers are able to go online on their own and transact directly with individual lenders.  I wondered, what would happen if we eliminated the intermediary field partners and gave microfinance borrowers the chance to raise loans directly from individual web users, in the same way as US-based P2P lending services such as Prosper and Lending Club?  I started Zidisha in order to provide a tool for highly motivated, computer-literate microfinance borrowers in the world’s poorest countries to do just that: Crowd-fund fairly priced business growth capital, limited only by their own track records and ability to provide value to lenders.

What was the biggest challenge in starting Zidisha?
Initially there was very little support for the idea of an international P2P lending service without any intermediaries.  Most people thought that low-income people in developing countries would not benefit from or repay the loans without local organizations to manage them.  At first, only a few family and friends were willing to join as lenders, and even they expected to lose their money.  We started very small and built up slowly.  In the absence of outside financial support, Zidisha was bootstrapped with a small amount of personal savings and small donations from lenders.  Three years later Zidisha members number in the thousands, and our repayment rate remains over 97%.  We’ve demonstrated that ordinary people in developing countries can indeed participate independently and responsibly in a direct P2P lending community, and this puts into question many of the assumptions on which traditional microfinance is based.

Zidisha’s model / interest rates:

From the stats page, I see that the average interest rate from a lender’s perspective is 3.40%. Could you tell us what is the average interest rate that borrowers choose?
Borrowers may propose to pay lenders any interest rate they choose.  To date, lender interest rates have usually ranged from 0% to 10% annually.  In addition, borrowers pay a service fee to Zidisha of 5% annually – so the total rate paid from the borrower’s perspective averages 8.40%.  Note that this is not much above the average rate of inflation in the borrowers’ countries.

Zidisha’s model is different from Kiva – you allow lenders and borrowers to set their own interest rates.  Does this attract different types of lenders (lovingly called “suits and ties”) who might put their profits ahead of actually doing good?
Our platform is designed to accommodate a wide range of preferences – from lenders who choose not to accept interest at all to those who prefer a blend of social impact and financial value.  We aim to allow a market mechanism to set interest rates, with as much freedom as possible for borrowers and lenders to reach mutually beneficial loan funding agreements.  To date, I believe the highest interest rate paid to lenders has been 10%.  Though our lenders have different philosophies regarding optimal interest rates, they are almost universally motivated to participate by altruism. Zidisha does not tend to attract purely profit-maximizing investors.

Do you advice borrowers on the loan size and interest rates? I mean, as a borrower, I can pick a high interest rate and struggle to pay back the loan, or I can pick very low (or zero) interest rate, and my loan might go unfunded.
We do advise borrowers of the average length of time that loan applications of varying interest rates take to be funded.  At the same time, we make it clear that the choice of what interest rate to offer is theirs.

How does the credit check work in countries where there is no concept of credit score and credit history?
Zidisha compensates for the lack of formal credit scores in borrowers’ countries by requiring applicants to have successfully repaid loans to local banks or microfinance institutions, and having their self-reported credit histories and other personal information independently verified before the borrower’s account is activated for posting of loan applications.  The local loan repayment record becomes the basis for the borrower’s “feedback rating”, a system similar to that used by business platforms such as eBay and Amazon, in which each lender is invited to post a comment and approval rating upon completion of a loan, and borrowers with high, positive feedback ratings find it easier to raise larger amounts at lower interest rates in the future.

One of the problems at Kiva is expired (unfunded) loans. Do you have this problem too?  What steps do you take to reduce the number of unfunded loans?
Yes, we often have more loan applications than available capital, and some loans expire unfunded as a result.  When a loan is not fully funded at the end of the fundraising period, partially funded amounts are returned to lenders and the applicant may post a new application.

In order to maximize the likelihood that our applicants will be funded, we provide advice on posting of quality photos and business plans, and try to limit our outreach efforts when lender capital is in short supply.  That said, most new borrowers come to us via word of mouth from our existing clients, and new applicant demand has been growing exponentially, even in the absence of any marketing on our part.

On one side we see organizations like Kiva and Zidisha doing amazing work to fight poverty. On the other side despite all the hard work, the income gap between the rich and the poor is increasing all the time, even more than before.  Do you think something needs to change fundamentally, for all the hard work to have long lasting effects, say in 50-100-200 years from now?
I think one thing that would make a major difference is to make it easier to transfer money and operate businesses across international borders.  To cite just one example, one of our entrepreneurs in Kenya who is a talented jewelry could make far greater profits by selling her bracelets in the US and Europe via an eBay store.  Unfortunately, PayPal does not offer payment services in Kenya due to regulatory restrictions.

Help:

Apart from funding loans, what kind of help do you need from the readers of this blog?
I would invite readers to give Zidisha a try, and to share their evaluations of our site with others via web fora, blogs and social media.  Our main obstacle to growth is that we are still relatively small and unknown, without resources to invest in marketing.  Almost every day, completely bankable loan applications expire unfunded at Zidisha for lack of lender capital.  The more we grow our community, the more opportunities we will be able to open up for highly motivated entrepreneurs in the world’s poorest locations to realize their ambitions.

Future plans:

Are there any plans to open up Zidisha’s data (like Kiva’s API) for other developers to analyze/build new applications?
Yes, as soon as we grow to the point where there is substantial interest, we intend to provide a platform whereby our data is publicly available for download.  In the meantime, we are happy to accommodate individual data requests.
Note also that we publish comprehensive statistics of on-time repayment rates, average interest rates, loan portfolio quality metrics, and other data by country in the More Statistics page of our website.

what plans do you have for Zidisha in the future? New countries/new types of loans etc?
We’re constantly improving our website in response to user feedback.  Currently, we are working on a feature that will allow lenders to join together in groups and track their collective impact – making Zidisha lending a collaborative as well as an individual endeavor.

We are also working to establish new lending programs in four additional West African countries: Benin, Guinea, Mali and Niger.  These are some of the most marginalized places on earth, and also home to some of the world’s most indomitable entrepreneurs.  For the first time in history, the spread of internet and communications technology is making it possible for ordinary people in such locations to bypass the geographic handicap that has traditionally held them back.  It’s a wonderful privilege to help level the playing field for such remarkable entrepreneurs.

Thank you so much for the interview, Julia.  Please check out Zidisha.  You can invest as little as one dollar to start with.