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Social enterprises lack access to the capital they need to scale. Crowdvetting makes it possible for them to get 0% interest loans from Kiva

Crowdsourcing the vetting of social enterprises to finance organizations that are generating prosperity and protecting the planet

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*Please Upload User Experience Map (as attachment) and any additional Beneficiary Feedback in this field

Attachments include: > Crowdvetting User Experience Map > List of social enterprise borrowers > Social enterprise feedback (OpenIDEO comments) > User feedback (OpenIDEO comments) > Tufts crowdvetting user feedback > UC Berkeley crowdvetting user feedback > +Acumen crowdvetting user feedback > +Acumen crowdvetting pilot results > Growth targets derived from +Acumen test > Prototype output

Explain your project idea in two sentences.

Social enterprises lack access to capital - it is expensive to vet them and hence they are excluded by many investors. We've built a platform that uses crowdsourcing to reduce vetting costs.

What is your organization name? Explain your organization in one sentence.

Kiva is a non-profit crowdfunding website that connects people through lending to alleviate poverty.

Is this project idea new for you or your organization? If no, how much have you already executed on?

Tested volunteer interest in a +Acumen challenge (Sep '16). Built prototype platform (Nov '16) and iterated based on user feedback (May '17). Piloted with professionals from BlackRock (Jun '17). Received pro bono design team interest to develop an improved UX, pending grants to implement.

What is the problem you aim to solve with this idea? How would you define this problem as urgent and a priority in your target community?

Social Enterprises, who use market forces to impact the poor or protect the environment, lack access to finance because it is expensive to vet them. They are too big for microfinance, yet too small for traditional banking. Crowdvetting will reduce that cost. Read more here:

What is the timeline for your project idea? What are the key steps for implementation in the next 1-3 years?

2017: Expand number of participating graduate programs and financial firms. Obtain grant funding to implement platform functionality upgrades (gamification, impact tracking, and skill certifications). 2018: Increase geographical diversity of vetters to draw out local insights and reduce financing friction for local enterprises. 2019: Validate reliability and quality of crowd’s output so that Kiva fully relies on crowd to conduct primary due diligence of social enterprises.

Describe the individual or team that will implement this idea (if a partnership, please explain breakdown of responsibility).

Crowdvetting is a project of Kiva's Strategic Initiatives team which is run by Carlos Pierre ( Carlos is the lead for Kiva’s Direct-to-Social-Enterprise program and has been a key driver in Kiva’s shift beyond its work in traditional microfinance.

What do you need the most support with in this project idea?

  • Program/Product/Service Design

What is your primary goal over the next 6 weeks of Refinement?

  • Iterate or improve on my product/service

How do you currently measure (or plan to measure) results for this project?

Vetter KPIs: # of Vetters: 48 # of Universities crowdvetting: 12+ (Fall 2017) # of companies crowdvetting: 1 # of social enterprises vetted: 16 (of 36 DSE total) # of Votes submitted: 299 Crowd accuracy in vetting: TBD Crowdvetting Program KPIs: USD crowdfunded: $676k (of $1.46m DSE total) Repayment rate: 94.7% on-time Jobs sustained/created: 559 (of 868 DSE total) Individuals impacted: ~50k (of 667k DSE total)

How has your project proposal changed due to your user research during the Beneficiary Feedback Phase?

We learned users want even more engagement through than we initially built-in. Users desire a stronger connection with the enterprises they helped vet, such as ongoing updates. More than just a "black box" for submitting evaluations, we now aim to make a place where relationships are built between vetters and borrowers.

(Optional) What are some of your still unanswered questions or concerns about this idea?

How will crowdvetting results compare to borrower repayment rate? How does the crowd's ability to pick successful enterprises compare to Kiva staff? How much training should we provide crowdvetters, if any? How can we provide a common language for vetting, while fostering a diversity of opinions? Should crowdvetting be restricted to a particular group (MBA candidates, financial services professionals) or open to anyone who wants to help vet Kiva's pipeline of social enterprises?

During this Improve Phase, please use the space below to add any additional information to your proposal.

Expert feedback questions: > Provide stronger articulation around how your idea bridges peace, planet and prosperity Crowdvetting enables social enterprises, which are already tackling poverty, protecting the environment, and promoting peace in their local communities, to access the capital they need to scale. (See examples in attachments). These early-stage organizations fall in the Missing Middle: they are too big for microfinance, yet too small for traditional banking. There are literally thousands of them, but only a handful are lucky enough to get the capital they need. Crowdvetting will open a path for social enterprises that bridge peace, planet, and prosperity to access capital, build the track record to attract institutional capital, and scale their impact. > Ensuring the quality of the experience as you grow and scale Quality of the user experience is the bedrock of this volunteer program. We are exploring both online and offline methods to improve their experience. As the number of volunteers scale, we would create levels based on track record and expertise to tailor interventions. Online we have seen that actively recruiting a diverse crowd creates opportunities for insightful and organic conversation. We are testing if we can leverage Kiva’s existing large community of volunteers to promote engagement. For example, we will have a small group of Kiva volunteers join the pilot with BlackRock professionals to provide insight on emerging markets or Kiva these professionals may lack. Offline we engage with impact investment clubs or Net Impact chapters to ensure users have a physical community with whom they can interact and discuss. Our results indicate that such offline groups increase participation online. These approaches will be proven at-scale in coming months, as we expect rapid growth of our platform when students return to campus in the Fall. Vetter Quality/Training : Initially, crowdvetting will be used to help prioritize promising enterprises, not to approve borrowers without Kiva supervision. This allows Kiva to gradually learn and test what works best with vetters. Participants tend to be more conservative than Kiva staff. They reject marginal applications that Kiva approves. Their unfamiliarity with a new business model or sector is a key factor in this. Over time, as vetters’ experience in a sector increases, they start to vote as Kiva does. This hints that the most effective training is practice doing vetting. Vetter Accountability: We want vetters’ individual results to be public (e.g # of enterprises reviews, loan volume approved, delinquency rate, default rate, sectors reviewed, etc.). Such public results can be used to demonstrate knowledge and we hope vetters add it to their resume and LinkedIn profiles. We are giving them valuable exposure to skills that usually require an internship at an impact investment fund to acquire. Creating an environment where they can develop a reputation on the platform that has value outside the community is likely to bring about their best performance. Opening Platform: Kiva will not immediately open up the program to the general public. When we do, we want to weight votes by the level of experience of the vetter. At scale, Kiva could use past vetting results to weight votes when aggregating the crowd’s results. E.g. If you are a professional in the solar sector, your votes on solar social enterprises will be weighted more heavily than the vote of an undergrad student. Other user attributes and interests could be used to tailor the evaluations they can review. Kiva could thus ensure quality of vetting while providing an open platform for anyone who wants to engage with innovative social enterprises. > Assess crowd vetting outcomes in making the final decision whether to finance competing proposals Initially, only Kiva’s Direct to Social Enterprise (DSE) program will use the output of the crowd. Currently, it is DSE that makes the final investment decision. As the crowdvetting platform matures and develops a track record for identifying creditworthy social enterprises, more responsibility will be able to go to the crowd. Other financial services firms (e.g. Lendahand, Sunfunder and Trine) have already established referral relationships with the DSE program. Once borrowers successfully raise Kiva funding, they use the loan to build the track record and become more attractive to later stage investors. Crowdvetting thus increases the likelihood that social enterprises can subsequently attract investors through traditional financial institutions. > User-feedback and growth strategy Most current and planned functionality for the platform has either been suggested by or validated by users as something that would improve their experience. Please see next section.

Note that you may also edit any of your previous answers within the proposal. Here is a great place to note any big final changes or iterations you have made to your proposal below:

It is part of our current processes to proactively reach out to users. Aside from email feedback, we set-up feedback calls with them, and if possible visit them on campus, and watch them use the platform. We have a policy of responding to any comment made on the platform within 48 hrs to ensure users feel heard and remain engaged. We are also planning on-line workshops and on-campus events to create more avenues to connect with Kiva staff. Guided by user feedback, we completely reconstructed our prototype platform at in early June 2017. While these hands-on methods do not scale, we follow the “do things that do not scale” mantra as these insights are key to understanding our users. As we grow, we plan to continue to do deep dives with specific user pools (e.g. reaching out to both the university with the highest participation rates and that with the lowest rate) and specific users (those that are most active, those that we lost after a few votes). Given the promising results from the pilots to date, Kiva is growing the size of our community to push the crowdvetting program. Three initiatives will be key to achieving this goal: > BlackRock pilot program BlackRock is the world’s largest asset management firm with $5.4T in assets under management. Kiva has launched a 6-week pilot crowdvetting program with working professionals from BlackRock. ~30 BlackRock employees of all levels and locations will vet 10 prospective Kiva borrowers on The pilot will provide further data on a crowd’s ability to make due diligence decisions, and also will give us feedback on platform preferences for professionals (compared to graduate students). Following the pilot, we hope to open crowdvetting up to all BlackRock employees. > Rapid growth in graduate student participation Following the positive response from our graduate student pilot, Kiva reached out to the NetImpact chapters at 20 universities to gauge interest in crowdvetting. As of June, over a dozen universities have committed to joining a crowdvetting program this Fall. Example partners include Tufts University, Duke University, UCLA, and Columbia University. In response to user feedback, Kiva will be organizing on-campus workshops and events as part of a structured, semester-long crowdvetting program for graduate students. Additionally, we are testing if crowdvetting can become part of university curriculums. Prof. Lawrence Louie of Hult University's MBA program will require students to crowdvet twice for his course "Finance and Social Enterprises". This summer, 100+ students from Hult's 7 global campuses will participate in crowdvetting as a part of the course's curriculum. Prof. Louie is excited about the applied learning experience that crowdvetting will provide students. He is also looking forward to the dialogue that will emerge between students, finance professionals, Kiva staff, and the social enterprises they will be vetting. > Design support by AdaptivePath at Capital One Currently, is the minimal viable product for crowdvetting. Our users desire more functionality (e.g. experience tracking, impact tracking, integrations with, and gamification features). To help refine our product concept, Kiva will receive pro-bono design support from AdaptivePath, Capital One’s team of human-centered designers. AdaptivePath’s support will help define a product roadmap for As Kiva identifies development resources, the product roadmap will guide iterative improvement of our live crowdvetting platform.

A note on due diligence and the cost of vetting social enterprises:

To establish the creditworthiness of potential borrowers, investors and lenders conduct due diligence. For most investors due diligence is a fairly fixed cost, meaning a similar level of due diligence is conducted for an investment of $50,000 as for an investment of $500,000. As a result, investors and lenders tend to prioritize larger investments at the exclusion of smaller firms. 

Because due diligence is expensive, most do not want to share their results. They do not want others to monetize their value. Because Kiva is a non-profit that lends at 0% and does not monetize its due diligence, Kiva is in an ideal position to receive and share the due diligence of others. We want others to help us find social enterprises Kiva can work with and we are happy to share the organizations we have invested in. 

Crowdvetting reduces the cost of vetting early-stage social enterprises for Kiva, in turn providing enterprises with access to affordable, crowdfunded working capital. It also alleviates the bottleneck of Kiva staff reviewing loan applications by prioritizing the most needful borrowers. By crowdsourcing the vetting of loan applications, Kiva can provide social enterprises access to the capital they need to scale their impact.

More background on the challenge we are working to address can be found in this Kiva Labs post on growing social enterprises (, this post on bridging the missing middle (, also in this announcement of Kiva's Direct-to-Social-Enterprise program (

Explain your idea

On one hand, there are many social enterprises creating market-based solutions to pressing societal issues: > (Peace) Global Trauma Project provides trauma mitigation services in conflict regions like South Sudan. > (Sustainable Agriculture) EcoFuels enables thousands of small-holder farmers across rural Kenya to sustainably harvest croton nuts, an abundant indigenous crop used to make biofuel and organic fertilizer. > (Clean Energy) Sikubora distributes pay-as-you-go solar home systems to remote communities in Tanzania. > (Clean Water) Saha Global sets up entrepreneurial women with a chlorinating business that provides clean water at affordable prices in rural Ghana. > (Jobs) Thread International provides income opportunities to poor plastic recyclers in Haiti and Honduras. > (Fair Trade) Vava Coffee pays smallholder coffee farmers in rural Kenya 50%+ above-market, fair trade prices for their specialty coffees. > (Education) ACTT refurbishes used computers to set up affordable computer labs in rural Tanzania. Unfortunately, social enterprises are unable to access the finance they need to scale. Microfinance institutions are equipped to deal with individuals not companies. Banks, impact investors, and multilateral agencies prefer larger loans because vetting early-stage social enterprises is costly. They are too big for microfinance, yet too small for traditional banking. On the other hand, there is is substantive growing interest in social entrepreneurship and impact investing. Graduate students and financial services professionals are eager to learn about and support social enterprises. They want to contribute more than just their money, they want to support enterprises with their time and skills. Crowdvetting harnesses the power of the crowd to reduce the cost of vetting social enterprises. Volunteers are given access to the same loan application materials that Kiva staff receive from prospective borrowers. They independently review the materials, ask questions, and submit a simple evaluation of the enterprise. The aggregated results are then used to prioritize the most needful applicants for Kiva’s consideration. Crowdvetting provides a radically scalable solution for individuals to support social enterprises with their skills. Through crowdvetting, graduate students and financial services professionals build deeper understanding of the challenges faced by bottom-of-pyramid populations. By crowdsourcing the vetting of loan applicants, Kiva can provide early-stage social enterprises access to 0% interest working capital loans. Crowdvetting makes it possible for social enterprises to access the capital they need to create opportunity for the world’s most vulnerable communities.

Who Benefits?

The primary beneficiaries of crowdvetting are social enterprises around the world (see examples of Kiva's DSE borrowers in attachments). Through crowdvetting, they will be able to access 0% interest working capital loans through Kiva, and in turn scale the impact of their work in local communities. Furthermore, volunteer crowdvetters (graduate students and financial services professionals) benefit by getting first hand experience in due diligence and learning about the innovative business models of early-stage social enterprises. Volunteers gain valuable professional experience by vetting and also better understand the challenges faced by bottom-of-pyramid populations.

How is your idea unique?

The Bridges Impact’s MIINT program leverages due diligence work from top tier MBA programs. It takes a year to complete and has one USD50k winner. It has successfully deployed USD150k in 3 years. Similarly, many others awards are powered by select volunteer judges and usually only one social enterprise can win each year. Crowdvetting is different because it is an open-platform, that works year-around, and allows for multiple proposals to be approved every month. Together with the DSE program, Crowdvetting has helped 16 social enterprises raise USD676k in under 10 months. The key advantage is Kiva’s ability to combine crowdvetting with crowdfunded capital. This capital is lent at 0% and is not return seeking. Its main goal is to achieve social impact. This allows Kiva to support what other investors would consider too risky or not profitable enough. Combined with crowdvetting, Kiva can provide social enterprises access to the capital they need to scale their impact.

Idea Proposal Stage

  • Prototyping: I have done some small tests or experiments with prospective users to continue developing my idea.
  • Piloting: I have started to implement my solution as a whole with a first set of real users.

Tell us more about you

Kiva is an international nonprofit, founded in 2005 and based in San Francisco, with a mission to connect people through lending to alleviate poverty. By lending as little as $25 on Kiva, anyone can help a borrower start or grow a business, go to school, access clean energy or realize their potential. Kiva lenders crowdfund an average of $2.5 million in loans each week, creating a unique, renewable pool of funds that is reshaping access to financial services around the world. 100% of every dollar lent on Kiva goes to funding loans. Kiva covers costs primarily through optional donations, as well as through support from grants and sponsors. Kiva believes lending alongside thousands of others is one of the most powerful and sustainable ways to create economic and social good. Lending on Kiva makes it easy to touch more lives with the same dollar: Fund a loan, get repaid, fund another. When a Kiva loan enables someone to grow a business and create opportunity for themselves, it creates opportunities for others as well. That ripple effect can shape the future for a family or an entire community. Kiva started as a pioneer in crowdfunding in 2005, and is constantly innovating to meet people’s diverse lending needs. Whether it’s reinventing microfinance with more flexible terms, lowering costs to borrowers, or supporting the missing middle we are always testing and learning.

Expertise in sector

  • 7+ years

Organization Filing Status

  • Yes, we are a registered non-profit.


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