1. INDIRECT PERSON TO
PERSON (P2P) PLATFORMS
Tim Hassett
VP Kiva

2. Overview
• Crowd Funding has Arrived
• Crowd Funding Microfinance
• Indirect P2P Market
• Global Impact of Indirect P2P Market
• Advantages & Disadvantages with Platforms
• Future of Indirect P2P Market
• Questions to Consider

3. Crowd Funding has Arrived
Raising large amounts of social capital through
small sums from many people
• Network for Good has raised over $500M
• Direct P2P has raised over $500M
• Zopa
• Prosper
• Lending Club
• Indirect P2P has raised over $250M

4. Crowd Funding Microfinance
“Person to Person Lending, Is Financial
Democracy a Click Away?” USAID Sept 2008
• Direct – Borrower posts loans directly to
platform
• Indirect – Borrower is posted by a Field
Partner
• Microplace – Notes from Issuers Sold

5. Connected Capital
Photo Credit: Connecting Dotz

6. Indirect P2P Market
Platform Loans Funded
($000)
Q1/2011
Kiva $210,000
MyC4 18,000
Babyloan 2,300
RangDe 1,000
MyELEN 900
TOTAL $232,200

7. Different Models From Survey of 24 Institutions
Financial Returns for Lenders
– 20 provide no return to lenders
– MyC4 is largest platform offering returns
Regional Focus
– 11 are global (Kiva) & 13 regional (Wokai)
Specialized Loan Products
– 6 specialize in certain loan products
• Vittana for Student Loans
• Energy in Common for Green Energy Loans

8. Different Models From Survey of 24 Platforms
Borrower Risk
Yes No
Deki Babyloan
Energy in Common MicroWorld
Good Return United Prosperity
Yes Kiva Xetic
MyC4
Partner Risk
Vittana
Lend for Peace Rang De (proportions of defaults covered by a
Zafen Contingency Fund)
No

9. Global Impact of Platforms
Provide early capital to help Field Partners scale
– Tier 2-4 MFIs
– Risk Transfer allows for product innovation that
may not be possible with commercial capital
Stimulate product innovation
– Risk Tolerant and Low Cost Capital
– Vittana and Energy In Common
Education Vehicle for Lenders
– Connection Caring Engagement

10. Advantages & Disadvantages
Advantages Disadvantages
• Attractive Source of Funding • Foreign Currency Loans
– Low cost – 9 of 24 Platforms lend in
– Risk Transfer foreign currency
• Public Relations and ability • Higher Operating Costs
to share best practices • Challenges to Borrower
• Ability to innovate when Privacy
borrower risk is transferred • Liquidity Concerns
to lenders – Many Platforms require
monthly repayments

11. Future Evolution of Sector
Larger SME Loans
– Able to finance the “missing middle”
Insurance Products
– Risk Transfer already entails credit insurance
– Crop or Business Interruption Insurance could be
appealing to lenders
Individual Development Accounts
– Lenders could match savings after pre-determined
criteria were achieved

12. Questions
• How large will this market sector grow in the
future?
• Does differentiation among platforms add
benefit for MFIs or does it create confusion?
• Should there be an accreditation of Indirect
P2P Platforms?
– Protecting Lenders
– Providing information to Field Partners