While reading Stanford News Magazine came across this story:
Kiva means “unity” in Swahili, and was founded in October 2005 by Matt and Jessica Flannery ( Stanford University Alumni)
What ? :Kiva Microfunds is an organization that allows people to lend money via the Internet to small businesses in developing countries
How it Works ? :Kiva allows microfinance institutions around the world, called "Field Partners", to post profiles of qualified local entrepreneurs on its website. Lenders browse and choose an entrepreneur they wish to fund. Kiva aggregates loan capital from individual lenders and transfers it to the appropriate Field Partners to disburse and administer. As the entrepreneurs repay their loans, the Field Partners remit funds back to Kiva. Once a loan is fully repaid, the Kiva lenders can withdraw their principal or re-loan it to another entrepreneur.
Lenders' funds are transferred to Kiva through PayPal, which does not collect its usual fees in this case. Field Partners generally charge interest from their borrowers, although Kiva claims to keep track of how much interest is charged and will not work with those charging unfair interest rates. Kiva lenders do not receive any interest because of US Government regulations. Kiva claims that its borrowers have a historical repayment rate of about 99.7%.
Few questions I am curious about :
(1) Scalability of this model;
(2) Operating Cost ( considering the pay-pal charge waiver is not there)
(3) Impact quotient etc.