Jun 10, 2011 KV Kiva HQ
By Kate Heryford
Kiva Ecosystem :: Kiva Staff, Partnerships
The reason for Kiva's success is no secret. Kiva has seen such amazing growth thanks to involvement from such a large, vibrant community of participants. At Kiva, we like to call this our 'Ecosystem'. The Kiva Ecosystem is made up of infinite components. We have chosen 10 contributors of the Ecosystem that we think give a great view into some special parts of how Kiva works. This post will look into the life of a Regional Director at Kiva, Michael Looft. He is responsible for the partnership between Kiva and our Field Partners in Europe and Asia. This post will describe his role in choosing, working with, and monitoring our Field Partners.


About Me

I absolutely love working for Kiva! Aside from every day being completely different, I believe that the work Kiva is doing is definitely having a direct impact on alleviating the effects of poverty around the world. As the Regional Director for Europe & Asia on Kiva's Global Investments team, I am responsible for setting strategy and managing the relationships with Kiva's partners.




Before shifting my career into microfinance, I had spent 12 years working for retails banks, commercial banks, and for a federal bank regulator. While I enjoyed my former life, microfinance offered me the opportunity to make an impact in the lives of families who lack access to the formal financial sector – something that is personally important to me. After resigning my job with the government, I returned to school in 2006 to study religion and development economics at Harvard. There I focused on how to design Shariah compliant microfinance products for Muslim communities, as well as researching the impacts of faith-based involvement in the microfinance industry. These studies have served me well in the regions that I oversee and with many of the field partners with whom we work.

Prior to joining Kiva, I organized savings and loan clubs (ASCAs) in Sierra Leone, developed a microfinance program for a US-based nonprofit operating in the Philippines, and worked as a data analyst for a microfinance institution in Guatemala. Working for these different organizations in different contexts helped me gain a greater understanding of how microfinance works on the ground - and most importantly, what sort of products, services, and approaches don't always work in the field. Culture can play such a large part that I have become convinced that international organizations like Kiva are very effective because they work with local partners who truly understand the context where they work.

There is a great deal that goes into the work that I do, so in the next sections I will attempt to give a broad overview of it.

Partnership Due Diligence

Before Kiva sets up a formal relationship with a field partner, we must determine if they are both financially healthy and also a good fit for Kiva. Kiva's field partners are microfinance institutions that are helping the poor to have access to financial services to help them sustain their businesses and families. The hope is that one day people will "graduate" from loans and generate enough savings over the long-run so that things like family emergencies and short-term cash flow issues do not plunge them deeper into poverty. We seek to select field partners that adhere to a strong mission of helping the poor and other marginalized groups; and with our 0% interest capital, we can often help organizations that have little or no access to other international funders. This can make the due diligence process more difficult because the potential partner either may not be used to the types of questions we ask or to the entire process itself.

First, we ask for essential documentation about the organization, such as five years worth of financial statements, operational reports, and the resumes of the board of directors and management personnel. We also spend three or four days on-site with the organization, interviewing everyone from board members, senior management, branch personnel, and especially the organization's clients. Because these clients could potentially be posted on Kiva's website and we want to make certain that they are pleased with the products and services of our potential partner. We also analyze the market in which they operate, interviewing additional stakeholders and sometimes even competitors.




The entire process is meant to determine whether or not the organization presents a credit risk to Kiva lenders and also how well the organization performs socially. A key question that we try to answer is how Kiva loans will be utilized. Can these loans be used to help the organization expand its offerings to clients? Can these loans help the organization reach out with new products or to new client segments that they could otherwise not reach? We fully understand that the 0% interest capital means that the potential partner may now have the ability to take their mission of alleviating poverty to a new level. So, I and the others on Kiva's Global Investments team take this part of our job very seriously.

Partnership Monitoring

Kiva is only as effective as the partnerships that we cultivate and maintain. Part of my job is ensuring that we support our field partners in the work that they are doing, and that we also maintain a high level of transparency with our lenders. In addition to spending one or two days on-site with our partners each year, my team also collects financial and operational information on a regular basis to ensure that the star rating that we have on the partner's page adequately reflects the risk presented by the organization's current state of health. We also actively work with our partners to determine ways that they can expand their outreach, particularly to clients who may be otherwise difficult to serve.




For example, the Ger district of Ulaanbaatar, the capital of Mongolia, is home to 600,000 former nomadic people living in felt tents (gers) who have increasingly flocked to the outskirts of the capital as a result of climate change. The colder winters are slowly killing off the livelihoods of nomadic farmers who long relied on a more predictable climate to sustain their livestock. Ulaanbaatar is now home to many new residents who are ill suited for city life, and as a result poverty has skyrocketed over the past 20 years. To survive the harsh winters, many people living in the Ger district use inefficient coal burning stoves for heat – with some of the poorer households resorting to burning everything from trash to old rubber tires to survive. A city once renowned for its clean, healthy air now faces a crisis that marks Ulaanbaatar as one of the most polluted cities on the planet. It has been estimated that Mongolia now spends roughly 4% of their GDP on health costs directly associated with the pollution in the capital.


I learned of this problem while traveling to Mongolia last year on a partnership monitoring trip. I knew that Kiva was already helping our partners expand their green loan products such as energy efficient stoves, insulation blankets to cover the ger homes, and even loans for solar panel kits. Hearing the stories of babies contracting lung cancer due to the dangerous air quality made me think of my own infant son and what type of healthy life we all want for our children. It made me realize that Kiva and its lenders can do much more to change the course of Ulaanbaatar's future, and we have since ramped up our efforts to work with our Mongolian partners to give them the much needed capital and support they need to continue to provide the types of products that can make a lasting difference on their nation’s air quality.

Final Thoughts

Kiva and its field partners attempt to bridge the gap between Kiva lenders and the ultimate clients that they support in a way that may seem simple on the website. However, so much work happens between the time a client signs their loan documentation and when they are connected to lenders around the world. I love working with a team of very passionate people who consider the impacts of everything we do, particularly on the clients. What initially led me into microfinance was a belief that loans for small businesses can help people struggling from the effects of poverty. I still believe that. However, the longer I work in this profession, the more I believe that understanding the culture, environment, and actual needs of clients may mean that products and services need to be tailored so that they help entire communities.

Having my own family has helped me understand and connect to the plight of people who struggle to ensure that the lives of their children are protected and nurtured so that they are placed in the best position to flourish. I will never forget the way I felt hearing about the babies in Mongolia and realizing that the relationship I have with my own family forms a strong basis upon which I connect with the work I am doing in microfinance. Listening to the concerns and ideas from our clients, our field partners, my colleagues at Kiva, and our generous lenders who visit Kiva's site inspires me to do my absolute best to continue to help connect people through lending to alleviate poverty.


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