Microfinance Managers Consider Online Funding: Is It Finance, Marketing, or Some...

Apr 2009
Washington D.C., United States, April, 28 2009 - Online platforms are changing the way we engage with the world. Facebook links, eBay auctions, ePal chats, even Second Life avatars—these are all online platforms that connect people, ideas, products, and markets. These platforms shape who we connect with as well as how we connect. This concept extends to philanthropy: Online philanthropy is changing the nature of how and where people give. An outgrowth of online philanthropy is online social investing.

Kiva.org is one of the best known online lending and investment platforms. Since its launch in 2005, Kiva has grabbed the attention (and wallets) of over 350,000 online lenders, called “Kiva Lenders,” who are eager to loan as little as $25 or $50 to microentrepreneurs through Kiva and its microfinance institution (MFI) partners. Kiva has inspired many other new online lending platforms.

Not surprisingly, Kiva’s success also has gained the attention of a growing number of MFIs that are searching for the capital and public awareness that the Kiva online lending platform often can provide. Kiva’s marketing function is hard to quantify, but Kiva’s widespread presence in the news and entertainment media, ranging from the Wall Street Journal to the Oprah Winfrey Show, makes Kiva and the MFIs whose clients are featured on Kiva.org important ambassadors for microfinance.

This growth in online lending and investment platforms presents an opportunity and a challenge for MFIs intent on tapping the potential of online lenders or investors. CGAP's latest Focus Note, Microfinance Managers Consider Online Funding: Is It Finance, Marketing or Something Else Entirely?focuses on the demand side of the equation and highlights issues that MFIs may want to consider before signing up for a loan from an online lending platform.

Source : CGAP

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