You cannot test courage cautiously. That was how John Haines, Executive Director of Mercy Corps Northwest, quoting Annie Dillard, introduced Jessica Jackley, co-founder of KIVA, the world’s first peer-to-peer micro lending marketplace. Jackley spoke at the Illahee Lectures on Monday 12 April.
Since 2005 KIVA has made over $130 million in loans from over 440,000 lenders to over 330,000 developing world entrepreneurs. The beauty of KIVA is that for as little as $25 you can participate in a $75 loan to a goat herder in Uganda, or $500 loan to a seamstress in Cambodia.
But Jessica Jackley’s story begins well before she learned about micro finance (financial services and products for the poor) from Mohammad Yunus in 2003, conceived KIVA in 2004, and made her first micro loan in 2005.
Her story begins with her introduction to poverty. As a six-year-old in Sunday school she learned that Jesus said the poor will always be with us, and that “whatever you do for the poor, you do for me.” Great, so even though you help the poor, there will always be poor people, and God is one of them, or maybe turns into one of them. A six-year-old’s mind pictures an endless line of poor people following her around, and wonders why God needs her help in the first place.
As a teenager Jackley was barraged with the same poverty relief messages we all see: the Sally Struthers ads featuring the adorable, grubby little waifs with saucer plate eyes. She felt guilty for her relative wealth. She would volunteer to help low income families fix their homes, but felt she wasn’t really making much difference. It really hit home when she travelled to Haiti on a poverty relief mission in high school, and then returned home to attend her lavish senior prom. The contrast undid her.
She looked for answers at Bucknell University, majoring in philosophy, poetry and political science. And then, when she took a break from her search, following a guy to California, taking a job just to pay the rent, the answers started coming to her.
She had landed at Stanford’s Center for Social Innovation, one of the leading social research / solutions institutes. She stayed after work, crashed classes, and one day in the fall of 2003, she went to a talk by some guy named Mohammad Yunus in front of 50 people. (Two years later he won a Nobel Prize.) Yunus described how he simply asked some poor women why they were poor, and ended up lending them money himself, and breaking their cycle of poverty. They weren’t sad, hopeless, or pitiful. They just needed a little capital to make a go of it.
In the spring of 2004, Jackley decided she wanted go talk with poor people too. So she got herself to Kenya and Uganda to interview people who had received micro loans, and maybe see what she could do herself. She expected to hear uplifting stories of entrepreneurial success. Instead it was about being able to put sugar in a guest’s tea, or to put a lock on their door, and finally feel secure.
The guy who had pulled her to California in the first place, Matt Flannery, flew to Africa to see what she was doing, and observed that she could do more than just lend these people some money and then stay in touch. She could put them on a web site and share their stories. And that’s what Jackley and seven cohorts did, raising $3,000 from friends and family to make a handful of loans in what they hoped was a legally kosher arrangement.
By October 2005, she had gone back to Stanford for her MBA, launched KIVA, and took ‘beta’ off the site. Sprinkle in bloggers and the magic of the Internet, and suddenly millions of people were interested. In their first year KIVA made $500,000 in loans. The next year it was $15 million. The next it was $40 million. And most recently it nearly reached $100 million in loans in 194 countries.
Jackley stepped down from KIVA last year and is now launching a new for-profit company, but she has taken the time to reflect on what she’s learned, not just at KIVA, but over the last twenty-five years, from that first encounter with poverty in Sunday school.
Firstly, know your mission. Know your identity. KIVA’s mission is to connect people through lending for poverty alleviation. It’s not let’s raise a bunch of money as fast as possible for microfinance, or let’s be a big network of micro finance institutions. At one point Jackley got a phone call from a fortune 500 company that wanted to dump $10 million of its social responsibility fund into KIVA. She said no thank you. It didn’t fit their mission of connecting people.
Secondly, embrace co-creation. Trust other people to work with you, to come in and cooperate. KIVA works with hundreds of micro finance institutions, and entrusts volunteer editors and translators to work on their web site. There’s a KIVA TV and a KIVA office in Second Life, both done outside of the company, but in a spirit of support and collaboration.
Thirdly, just get started, and then refine the idea. Put something out there and see how it goes. Rather than getting it perfect, or having a plan to “reach five million people in three years.” Put it out there, test it and improve it as you go.
Finally, focus on individual human beings. Market research and surveys are great, but sitting down and talking one-on-one is invaluable. Many of Jackley’s colleagues asked her why she didn’t just go to the “Google guys” for a bunch of money and then give it to a micro finance institution. Or why she didn’t just make a cool brochure with the most compelling rags-to-riches story on the cover, and slog that. She rejected all that and went with real stories – the popcorn seller in Samoa, the butcher in Afghanistan, the vegetable venders in Kenya, the taxi driver in Bulgaria, the food cart in Mexico, the bike repair guy in Ecuador, the day-care provider in San Francisco.
San Francisco? That’s right, KIVA launched in United States in 2009, (and has been met with mixed reviews). This sets up the possibility that the goat herder in Uganda might lend to the day-care provider in San Francisco.
Loans are sticky. They create relationships. It’s not just about money, because it’s a zero percent loan. It’s about quality and partnership and respect. Recently Jackley was leading a party of generous American donors (not KIVA) on a trip through Kenya. As they stopped in a village, one of her donors, overcome with emotion, left the group and approached a group of Kenyan women sitting at a gathering, and tears streaming down her face, gushed, “Hello, I’m the one who gave you your loan!” The Kenyan women looked up at her and then at each other, and then one of them stood up and replied, “Thank you, we’re the ones who paid you back.”
Back to the original problem that vexed Jackely from her youth until she founded KIVA: Thousands of children die each year. Hunger and poverty are entrenched. It seems hopeless.
It seems hopeless because we’ve told ourselves two stories: The problem is not going away, so whatever we do won’t matter, so we’ve stopped believing in our own ability to make any change in the world. And we’ve been told so many stores of sadness and suffering, that we’ve stopped believing in the poor person’s potential to do something positive and powerful in their own lives.
KIVA and other efforts can change the way we see each other, and believe in each other, and show us that we have the potential to do great things, and so does the person on the other side of the planet. And that’s what Jackley thinks really changes the world.
Tomorrow: Q&A with Jessica Jackley, and some loose ends on micro lending.