Jun 27, 2016 KV Kiva HQ
By Carlos Pierre
Kiva launches direct to social enterprise program
The direct to social enterprise program is a pilot program that aims to raise capital for social enterprises in a new and more efficient way. Social enterprises have the potential to strengthen their communities and reduce poverty by expanding formal employment, scaling innovative social solutions and driving sustainable economic growth. However, they often fall in the “missing middle,” meaning they are too small for traditional banks, but too big for microfinance.

In the past, Kiva has used 2 different models to support small social enterprises:
  • The social enterprise itself is set up as a Kiva Field Partner: Under this model, the social enterprise must have its own borrowers, whose profiles they post on Kiva. However, if an organization’s business model does not allow for an easy overlay of a credit program on top of their core operations, they tend to have difficulty implementing and scaling Kiva. In addition, if an organization needs to raise capital for itself (e.g., to obtain new machinery, buy more inventory, or run a pilot program), there is currently no way to accomplish that through Kiva, as the Kiva model does not allow Field Partners to raise capital for themselves, only for their borrowers.

  • The social enterprise is a borrower of a Kiva Field Partner: Under this model, the Field Partner is typically an impact investment fund, social enterprise  accelerator or other organization whose primary clientele is social enterprises. When these types of Field Partners post larger loans for social enterprises on Kiva, they tend to be extremely popular (they have funded around 16x faster than other loans, and expire less often). However, growth through this model has been slow -- impact investment funds simply invest in too few social enterprises to be able to post loans to Kiva on a regular basis, and accelerators often turn away many applicants due to risk.

Based on the results of these previous 2 models, Kiva is embarking on its next iteration of crowdfunding capital for social enterprises: the direct to social enterprise program. Through this pilot, Kiva will explore whether it can reach more social enterprises and lower operational costs (for the social enterprise and for Kiva) by facilitating lending directly. This is how it’ll work:

  • Kiva will post a single loan for each social enterprise. This means there will be no Field Partner; rather, Kiva itself will post the loan.

  • To qualify for this program, a social enterprise must be a legally registered entity with clearly measurable social impact, sustainable business model (sensible unit economics) and an active stream of operating revenue. See FAQ below for additional qualifications.

  • Loan sizes will range from $10,000 to $50,000, with terms of 18 months or less.

By reducing the complexity of working with Kiva, we aim to more efficiently support the needs of social enterprises that do not have the resources to run a credit program and do not have access to an aggregator or investment fund that can act as an intermediary (i.e. Field Partner) for their Kiva loan.

We hope Kiva lenders will be excited for the potential to support a more diverse number of social enterprises through the direct to social enterprise program, and through that, help address the financing needs of the missing middle in a new way.



How will lenders know a loan is part of the direct to social enterprise program?

The description for these loans will clearly reference the direct to social enterprise program. In addition, in the field that normally lists the Field Partner it will read: “N/A, direct to [name of social enterprise]”.

What types of social enterprises qualify to be a borrower through the direct to social enterprise program?

All borrowers receiving loans through Kiva’s direct to social enterprise program must meet the following requirements:

  • Have a clear social mission that’s readily measurable and display a strong commitment to serving the needs of  poor, vulnerable and/or excluded populations.

  • Have a clear business model whose unit economics are sustainable and enable sufficient cash flows for loan repayment

  • Be legally registered in its country of operation.

  • Have a corporate bank account (i.e. not a personal one).

  • Have an active stream of operating revenue (i.e. must be beyond the idea phase).

  • Be able to legally accept and repay U.S. dollar debt capital.

Please note: there is no plan at this time for the direct to social enterprise program to lend to individuals. Instead, all borrowers will be social enterprises.

How does the direct to social enterprise program differ from Kiva’s direct lending program in the U.S.?

There are similarities between the direct to social enterprise program and Kiva’s direct lending program in the U.S., as Kiva will be lending directly to the borrower without a Field Partner or other intermediary. However, there are a number of things that are distinct to the direct to social enterprise program:

  1. This program will specifically exclude individuals as borrowers by only lending to legally incorporated social enterprises.

  2. PayPal will not be used to send and receive money from borrowers, as is the case with Kiva U.S. loans. Instead, funds will be transferred between Kiva and the borrower using the existing bank wire system Kiva uses with its Field Partners.

  3. Loans will be for borrowers operating outside of the United States.

  4. The program will not use social underwriting for determining risk; instead Kiva will apply a more traditional underwriting model.


Thanks for the insightful article! How can we as a social enterprise be considered for this program? Is there an application process? Thanks in advance for your help! Rachel

What an incredible opportunity to impact multiple families on both sides of the water through social enterprise. Keep it up!!

What definition of "social enterprise" do you use? Would a sole proprietorship or a co-operative quality, if the business meets the social mission criteria?

What definition of "social enterprise" do you use? Would a sole proprietorship or a co-operative quality, if the business meets the social mission criteria?

This is a great improvement on KIVA! We are The Appropriate Technology Collaborative, 501(c)3; we are incubating a middle-income social enterprise, majority women, that is providing solar power solutions to rural communities. They are Soluciones Energeticas Apropiadas, www.seaguate.com. They are in need of seed capital to import quality, cost effective solar products and distribute to the rural poor through community training programs and women's training in sales and microenterprise. We'd love to know if we can work with KIVA to support SEA's start up.

The first loan in this program that I noticed is the current one funding Moko Enterprises in Kenya. The description of the business seems oddly short given that Kiva is making this a direct loan. I'm sure that your due diligence has been thorough but I fail to understand from the text what Moko exactly manufactures, to whom it sells, who owns Moko and why the repayment schedule is irregular (in a high volume business with lots of small transactions, I would expect they could make lots of small repayments). Also, the loan is marked as having no currency risk. How does that work. Have you hedged the repayments? Thanks, Ansgar

How can we as a social enterprise be considered for this program? Is there an application process? Thanks in advance for your help

What about unintended consequences. For example the donkey seeder in Mali. In order to use s seeder, ALL the roots must be removed. Meaning the Bush will not grow back as in traditional make a hole and seed method. I agree the donkey seeder is much more efficient, but soon there will be more desert without traditional regeneration

I am happy for the works of Kiva .org in worldwide and to all persons.But now i am trustee of Kiva and i am Zambian working for community,rural ares for the rejected people in community and villages in all rights for persons we can change and build world together and development and better world together.For information you can contact me www.socialprotection.org/users/francis.mbalanga

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move forward for success....

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Carlos is a Manager for Kiva's Strategic Initiatives. He is helping push the Kiva's model to go beyond micro-finance institutions to work with universities, agricultural coops, solar power distributors, fair trade companies and other types of social enterprises that can benefit from the use of credit. He covers all the regions except Africa. Born and raised among the blatant inequalities of Mexico City, Carlos graduated from Brown University with a degree focus on development. He has studied in China, Mexico and Japan. For eight years he worked in Tokyo, London and New York as derivatives trader specializing in Emerging Markets at Deutsche Bank and Citi. Carlos also worked as a Kiva Fellow in El Salvador. He is determined to push social change via market mechanisms and wants to help bridge the financing gaps faced by social enterprises.

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