Kiva
by Margaret Heffernan

One of Yvonne Thoroughgood’s earliest memories is of Christmas Day, when she sat by a river bank in Jamaica, making a Christmas present for herself out of grass and an old glass bottle. Another early memory is her first pair of new shoes – at the age of fifteen. Born in Jamaica, she came to the UK when she was twenty-five where she qualified as a midwife at King’s College, London. She now lives in Kent.

Yvonne probably isn’t the kind of person who springs to mind when you think of the investment community. She isn’t a City slicker, she doesn’t have an MBA and she doesn’t hang out with venture capitalists. And yet she has participated in bringing over two hundred new businesses to life.

She’s done that by participating in KIVA. It’s what’s called a peer-to-peer lending site. Kiva’s website features businesses all over the world that need funding – and it takes in money from all over the world to provide it. Field partners vet every business plan and the people involved, they administer the loans and report progress. As of August 29th, KIVA has funded over 15,000 businesses with loans totalling over ten million dollars. 97.69 percent of those loans are fully repaid. The average time it takes to fund a loan is 1.24 days – and the average term of a loan a mere ten months. These are numbers that should stop high street bank managers in their tracks.

What’s particularly exciting about KIVA is that lenders – like Yvonne - come from everywhere. Because the minimum loan is as little as twenty-five dollars, thousands of individuals have become investors in entrepreneurship. As Fiona Ramsey at KIVA told me, this has democratized investing. “We have people on disability who can’t donate to charities, who feel they have so little to give. But even though they can’t give, they can loan, knowing they’ll get their money back. So it makes them feel empowered too.” In return for their participation, investors get regular reports and twenty percent of recipients post journals relating their progress. Some of the more committed investors travel to visit the companies they’ve helped to create. Currently over a million new investment dollars come into KIVA every month to be invested. Yvonne Thoroughgood is an exceptional woman – but she’s part of a growing throng.

“It’s such a beautiful model,” Yvonne says. “Because the people on KIVA aren’t asking for handouts. They’re just asking for help to get a step up the ladder. They don’t want the money for themselves, it isn’t charity. And when they’ve had help, in the future, they can be in a position to give help back.”

KIVA isn’t the only peer-to-peer lending organization online. ZOPA.com aggregates individual lenders to make money for them, as though they were a bank; PROSPER.com is more focused on individuals trying to consolidate and pay off debt. What makes KIVA so exciting is that it is focused on building new businesses. Its founders understand that business is a powerful and sustainable way to change the world, by creating jobs, developing skills, provoking communication. Businesses build community and wealth at the same time.

The government knows this too, which is why it keeps looking for ways to raise levels of entrepreneurship in the UK. But too many of these efforts have been inherently un- entrepreneurial, preferring documents and thinktanks to real live action. Why, I keep wondering, can’t we have a KIVA here, for UK businesses? Currently it is focused on the developing world. But I’ve visited desperate inner city communities – in Nottingham, London, Bristol – that with the tiniest seed money could start to make a difference. Venture capitalists couldn’t make enough money out of them and angel investors live in a different part of town. But what KIVA offers has a dual benefit: it helps to build businesses – and it helps to engage a far wider community in the world of business. And they emerge with a view of commercial life that, for once, isn’t narrow, mean and cynical.

“I’ve been talking to my colleagues at work,” Yvonne says, “about each contributing a pound a month. We’d need twelve people to invest as a group. And then we could discuss which businesses to back and do that together. Even my manager says she’ll do it. A pound a month – that’s like change! I think most people in the world can relate to KIVA.”

I’ve always maintained that most people in the world can relate to business – and the business world would be better off if they did. Yvonne Thoroughgood had no experience of business when she started her investing. She started off with just one or two loans. Today, with a portfolio of over 200 companies, she still invests when she has the time. Professionally she’s a midwife – but she’s giving birth to a lot more than new babies now.

© Margaret Heffernan

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