Social Enterprise Facilitates Online Micro-loans for Small Entrepreneurs

Kiva is a unique social enterprise that enables small entrepreneurs in more than 60 countries to receive microfinancing online. Kiva promotes the idea of online giving by allowing Internet users to offer micro-loans of as little as $25 to small businesses around the world.

Kiva.org was founded by Premal Shah, who used his experience as a former principal product manager at the leading online payment firm PayPal to promote online microfinance. Shah established Kiva in 2005 as a social enterprise, and since then the company has facilitated more than $250 million in micro-loans. Kiva continues to grow from strength to strength with each passing year. One of the key achievements of Kiva has been that the enterprise has raised the bar for similar online microfinance operations.

Shah says, "Social entrepreneurs want their idea to spread. There are over 20 websites that look a lot like Kiva, and we're trying to help them out — to help them get traction as well." The idea of microfinance as a social entrepreneurial tool was originally propagated by the Grameen Bank in Bangladesh, which was founded by the Nobel Peace Prize winner Muhammad Yunus.

Modern day social entrepreneurs are socially motivated businesspeople and thinkers. Bill Drayton, the founder of an investment firm, says that these entrepreneurs are more than just market professionals. Just as one invests in capital, these entrepreneurs invest in social change. Drayton says, "Their goal is to get the system to evolve in the fundamental pattern-change ways that will help the children, the parents, the society - the whole thing. They see a problem, and they can't imagine stopping and being happy in life until they've changed the pattern in the field."

Phil Buchanan, president of the Center for Effective Philanthropy, says that the idea that for-profit enterprises can promote social good is not new. Buchanan says, "For decades, foundations and major individual philanthropists have brought more than just financial resources to bear. So much that gets packaged as innovation is just a surfacing of what's been going on for a long time. It's not new, but it's important. It plays out in very different ways."

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