Quick Snapshot Analysis on Kiva

[Guest]

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[Natasha]

 

[RichardF]

Natasha!!! 
   

[Spartan]

A most excellent preliminary analysis.   

I was thinking about this very topic the other day when I was talking to one of my clients about Kiva. He is a global business unit planning manager for a top tech multinational here in Japan and we often have such wonderful meetings talking about different business models and service engineering concepts that I sometimes feel bad when I get paid for enjoying myself that much and with another man to boot. But I digress...

You touched on all the issue I considered and then some - Kudos to you. I even like the focus on KF throughout your analysis. 

[Natasha]

Sad isn't it that I would actually spend hours on doing this??

[Spartan]

Not in the slightest - trust me. Shoot I often do this type of analysis as purely a mental exercise for kicks. For example, once I did a full blown economic impact analysis of the Civilization game from a players perspective, within the game, as an extra paper for a class and the professor was so impressed with it, he counted it as my term paper. Anyway this type of thinking is much better then simple crosswords or other such things in my opinion. Moreover I have great respect for people who do this kind of thinking just for fun. It is a sure sign of a highly disciplined and focused mind.   

[AccountAbility]

Kudos, Natasha, on a thorough analysis to the whole Kiva enterprise.

One aspect that you could expand upon is that of Kiva as retailer. 

Kiva attempts to get wholesalers/manufacturers to provide product to Kiva's specifications, with only the leverage of quantity buys. The specs which its customers demand stretches the abilities of the manufacturers to comply. 

In an open marketplace how can Kiva increase its appeal as a retail distributor so it can fully stock its shelves with good product?

Dan

[Natasha]

Gee Dan - one would think I was running a free consulting business!!

Maybe some of our talented captains of industry can also help us out here ...

[Peter S]

Natasha - that is a truly valuable piece of work.   We are all in your debt, and so will Kiva staffers be if they should stop by to read it.  In my opinion it should be required reading for Matt Flannery (CEO), Premal Shah (President) and Olana Hirsch Khan (COO), and it would be excellent if one of them would drop by and find the time to engage with it and respond to it here.

Hopefully reading some of these points have got you thinking - you're too darn right there!

I haven't got time to say all that I want to say about it - I have a huge workload in front of me today - but just briefly, I'd want to focus in on where, under "weaknesses", you say "supply of lenders exceeding demand of loans".

This is true only in Kiva's small shop window as we experience it, not true of the wider universe where the supply of free - socially motivated - loan capital for "development" massively undershoots the demand for it.  Theoretically there must be an unlimited demand for free loan capital, in a global market where an MFI might expect to pay upwards of say 6%..

For me the critical problem facing Kiva as it "scales up" is that they need to bring on board very many more Field Partners, to bring supply and demand into balance in the Kiva "store".  And that brings heavy costs... the costs of due diligence, the costs of training and monitoring new Field Partners, and maybe more significantly, the risks (of increased delinquencies and defaults) that will result from it probably being necessary to partner with some of the submerged 90% of the world's MFI's that Kiva currently doesn't have relationships with.

Until they bring those new Field Partners on board, I think Kiva probably needs to soft-pedal on reaching out to and attracting new lenders.  There's no point in bringing customers to an empty store.   The whole supply/demand problem will have been solved only when we finally see a loan that is not fully subscribed in the allotted 30 days, and we're a very long way indeed from seeing that happen.

Peter

[Jundee]

Excellent post Natasha.

The powers that be at kiva.org ought to frame it & look at it every so often.

[Natasha]

Sorry Peter - you are right about the weaknesses - I was speaking purely from a consumer perspective to Kiva "shop window" - not about where it stands in the wider market. I was just trying to make the point that it doesn't make sense wanting to attract new lenders when you can't actually deliver to them. Its not like this is the shiny new toy that every kid wants i.e. fad where your business objective is to create a demand that exceeds a supply and you know that it is not going to last longer until the next new thing is around the corner (think Nintendo play stations etc). This isn't the prudent marketing strategy I would think that Kiva wants to employ for long term success...

Ok... This was only meant to be a starting point to generate thoughts and to get our business gurus from around the globe thinking and talking...