Article originally published on Medium.
This post was co-authored with Jasjit Singh, Professor and Co-Director of the INSEAD Social Entrepreneurship Programme
As a first output from an ongoing collaboration between Kiva and INSEAD, we are pleased to announce the release of a new INSEAD case study “Kiva’s Impact Strategy.” The case transparently documents Kiva’s impact journey since its creation, and highlights ongoing initiatives to continue to strengthen Kiva’s impact.
One of the things that goes unnoticed about Kiva is the quiet yet constant pursuit to increase not only the “breadth” but also the “depth” of impact that is being achieved. This involves pushing further to ensure that Kiva reaches more excluded and impoverished communities, and makes a substantial positive difference in their lives through lending. Kiva’s strategy to continuously deepen impact — either directly or through its Lending Partners — has a growing base of research-backed studies behind it, giving all the stakeholders and supporters more confidence that real impact is being achieved on the ground.
This is hard to do well, and hard to measure. But it is critical to do. The case we are sharing illustrates Kiva’s impact journey: the challenges, the learnings, and the commitment towards continuing to both expand and deepen Kiva’s impact at scale.
Here is a brief summary of the case:
While access to capital can be a hurdle for all entrepreneurs, the issue is particularly severe for those at the so-called “base of the pyramid.” Microfinance once seemed like an ideal solution for widespread entrepreneurship-driven poverty alleviation. However, recent randomized impact evaluations, often led by prominent development economists, have shown that a broad adoption of microfinance is not the silver bullet it was once hoped to be.
When critics start to raise questions about the extent of social impact an intervention is really having, it is easy to either ignore them or to turn defensive. Kiva chose to do neither. Instead, it has been extremely receptive to feedback, striving to use the growing evidence base to continuously refine its existing offerings and also come up with more impactful products.
Over the years, Kiva has been experimenting with extending its original microfinance model in three ways: focused funding of impactful microfinance projects, helping early-stage social enterprises to scale up, and direct person-to-person lending for entrepreneurs. Not all efforts have been equally successful, but significant progress has already been made. Over the years, Kiva has also partnered with researchers to support large-sample studies and rigorous evaluations of many of its individual interventions in order to inform future efforts.
More recently, Kiva has started to pursue an overarching, proactive strategy where rigorous considerations of impact are integrated into all activities from the start. A specific effort within this is its new “Impact Scoring” initiative, supported by the Mastercard Foundation. As a part of this initiative, Kiva has been conducting an in-depth review of the academic literature as well as other evidence related to impact of lending in specific contexts. The result is an evolving database that identifies and codes lending practices and product attributes with the most impact potential. Efforts are underway to use this evidence base to inform the products Kiva offers as well as how they are presented to its user base.
Although many details still have to be worked out and various implementation approaches are still being explored, the various initiatives to grow both the breadth and depth of Kiva’s impact in a sustainable way look promising.
Kiva’s impact journey demonstrates how, while having a strong sense of mission is a great starting point for any organization, it is also critical that these good intentions be complemented by continuous effort to improve one’s real impact.
Driven by a desire to do more, and do better, Kiva will rightly continue to evolve and innovate. Kiva is already exploring different ways to expand their two-sided marketplace in both products and stakeholders. Kiva has also announced the Kiva Protocol, a partnership with the UN and the government of Sierra Leone to empower millions of Sierra Leone citizens with a digital, financial identity. These efforts, like the ones before them, will be developed, implemented, and ultimately evaluated, through the dimension of impact.
Social enterprises work on really tough problems in contexts with a lot of uncertainty, and it would be unrealistic to expect perfection from year one. Instead, by building humility and learning into its DNA from the start, a social enterprise can contribute so much more to society by sharing experiences as well as drawing upon cumulative knowledge on effectively achieving social impact.
