Head over to the WIRED Money 2015 hub for more coverage of the thought leaders and innovators speaking at this year's summit.
The numbers involved in the world's biggest crowd-lending marketplace Kivaare impressive on their own; total loans have grown from $5 million in 2007 to $200 million in 2011 — and a total of $1 billion is projected to be loaned by 2017. Kiva now has 1.3 million lenders, with $400 invested on average each, and a 98 percent repayment rate by its debtors, 80 percent of whom are women.
As for the crowd-lending market as a whole? Kiva now has at least 1,500 competitors from Kickstarter to Lending Club.
But numbers aside, Julie Hanna, executive chair of the board at Kiva, told WIRED Money 2015 at London's British Museum that the real value of crowd-lending is found in the human stories: people like Teresa Goines, a former corrections worker from the United States who created supper-club Old Skool Cafe to help young offenders back into work through a crowd-funding network, or Elizabeth Omalla, a widow from Uganda who became one of the very first recipients of a crowd-funded loan in 2005 to transform her business selling fish on a micro scale to the point where she could send her children to school.
These are the people who Hanna says can be transformed by what she calls 'the world's bank', in which the wisdom, and ultimately trusting compassion, of crowds is used to fund business and sustainable innovation.
Speaking at the 'Marketplaces and the Crowd' session at WIRED Money with Samir Desai (Funding Circle) and Darren Westlake (Crowdcube) said that "my definition of justice is in the form of fair access". "I saw technology as the most democratising force in the history of humankind," she said. "Virtually every human being can be connected to every other humanbeing. It is one large organism."
Hanna, who also acts as an advisor to Lyft, Lending Club, Bonobos and incubator IdeaLab and was a founder or founding executive of Healtheon, Portola and onebox.com, said that Kiva was focused on being one of the marketplaces that can enable "the next billion entrepreneurs" to make new lives. "The world's bank is a bottoms-up, nimble, person-to-person network," she said. Part of that is connecting those people with their local communities; Kiva has found that ensuring part of its loans are funded within the user's own community boosts repayment rates. "When people know that it's people lending to them, that commitment, that motivation to repay the loan far exceeds the institutional obligation that comes with bank lending," she said.
One way of thinking about it is as It's A Wonderful Life, but on a world scale, she said.
If people can't pay back their loans, usually it's down to extrinsic circumstances, she said. The ebola crisis of 2014 led to a spike, for instance. But in general most people are able to transform their lives — and often come back for more loans, once the first is paid off. "Talent is universal, opportunity is not," Hanna said.
Recently named a Presidential Ambassador for Global Entrepreneurship by President Obama, Hanna's wider aim is to inspire innovators to start businesses no matter where they are based around the world.That must include ensuring the half of the world living on less than $2 per day can have the opportunity to make a future for themselves. "Things we thought were just local can happen globally... And it's reminding us that we are all entrepreneurs, we're all artists, we're all writers," she said.
This article was originally published by WIRED UK
