Apologies for missing much of the morning. I gave a lecture in my friend Munro Price’s program at the Annenberg Summer program in Oxford. I’ll be missing some more talks this afternoon as well, getting ready for my afternoon talk… Sorry!
Jessica Jackley, one of the cofounders of Kiva, tells us that she’s going to tell us a love story. “The stories we tell each other, and tell about our own lives matter.” She first heard stories about the poor when she was six years old and in Sunday School. She was told that we needed to help and that Jesus wanted us to give to the poor, and she was psyched to help. But she was also very frustrated, because Jesus also said, the poor will always be with us. She said she felt angry, overwhelmed, like a homework assignment that couldn’t be completed. “I didn’t know what would happen when I ran out of things to give.”
As she grew up, the other stories about the poor were no more positive – “I got the idea that the poor in the world live lives wrought with suffering, sadness, devestation and hopelessness.” This led her to feel guilty about her relative wealth… which meant she stopped listening closely to their stories and stopped expecting real change.
“I gave when solutions were on sale – you can save a child’s life for the cost of a cup of coffee, who can argue with that?” The giving wasn’t out of a place of generosity or hope – it became a transaction, a purchase of the right to go on with her day and not be bothered by bad news.
Things shifted for her when she heard Dr. Mohammed Yunus speak, three years before he won the Nobel Prize for his pioneering work in microfinance and microlending. She was excited both because microlending looked like something she wanted to be a part of… and because the stories Yunus told about the poor were about strong, creative entrepreneurs, not about the helpless and desperate.
So she quit her job, moved to East Africa and started interviewing people who’d received $100 loans. She got to see the implications of these loans – the fact that people could send kids to school, put locks on their doors, buy sugar to put in their tea.
“Even if I could have taken a magic wand and fixed things, I would have gotten a lot wrong.” When people help themselves, they get to find their own solutions, which was humbling for her to discover. She also discovered that no one asked her for donations – if anything, they wanted a loan.
Jessica decided that passing on these stories would lead a group of people to want to lend money to the people in East Africa she’d meant. So she came back with a digital camera, did work her with partner Matt, and launched a site that she “spammed” to friends and family. in 2005, Kiva facilitated $500,000 in loans… now, five years later, it’s facilitated $150 million in loans in 200 countries.
“To me, Kiva’s really about stories – it’s about retelling stories about the poor.” The goal is to avoid the “donor-beneficiary weirdness” that characterizes a lot of aid relationships and to blur lines between rich and poor, leading to more open, just and creative interactions.
Loans are a form of connectivity. When you lend people money and they pay you back over time, it’s an ongoing relationship and the opportunity to build a relationship. And loans are a way to give community and money, which is more powerful than just providing money.
Jessica’s new project looks at entrepreneurship closer to home. Profounder, launching this week, is designed to provide crowdfunding for investments from friends and family and provide returns to them. Founders can design terms for investment, and can give revenues from the business to investors, who can either keep those returns or automatically donate them to a charity. The project focuses on the idea that 85% of funding for new businesses in the US comes from friends and family. This process is usually pretty awkward, and Profounder makes it easier, more formal and better organized.
Jessica reminds us that these systems – Kiva, Profounder – are just tools. We need to care to make them work.