Fresh (Southern) Voice on Kiva

Most of the verbiage about Kiva recently has come from northerners. Here's Kenyan Margaret W. Karuri, who founded the microcreditor People Microcredit Investment Bureau (PEMCI). PEMCI was a Kiva partner until it was upended by regional violence after the Kenyan election two years ago. She defends Kiva while arguing that the cost of its capital for partners such as PEMCI is not trivial:

Kiva is a noble innovation which has changed the lives of many across the globe. I feel like some of us are playing the “devils advocate”. Not bad, as long as we come up with some constructive recommendations and suggestions on how Kiva can improve its administration. To Kiva, Kudos' for the good work you are doing. My advice, “All things work together for Good”. Other than kill a noble initiative like this, let us suggest ways, in which we can further grow the idea, improve on it, and ensure that it continues to deliver on its mandate. Today it is Kiva, who will it be tomorrow? We don’t want to discourage innovative ideas and mechanisms that are essential in changing the way we carry out the microfinance business....We identified the client, posted their pictures and business/personal profile on Kiva website. Kiva raised the funds and transferred this to us for on lending....Through frequent reporting and updates Kiva ensured that there was transparency and complete disclosure in the operations of the MFI. Lender also received frequent updates on the client through the Journal postings. In 2007, to improve our reporting to Kiva we were obliged to install Loan Performer, a loan management system which carries an annual fee. You can imagine the challenge that this whole process posed for young MFI’s with limited capacity like ours. Not to mention staff time and technological challenge of generating such reports in an underdeveloped environments like ours. But we had to do it, to satisfy Kiva requirements and qualify for funding. Funding from Kiva does not come as cheap as some would make it look....Can the lenders bypass Kiva and go directly to the clients/beneficiaries as suggested by some as per eBay and the financial area, Prosper.com, models? Maybe! But, would this move the kind of resource volumes that Kiva has managed to do? How would a lender in North America identify a needy entrepreneur in a remote village in Kenya? Internet? I think less than 2% of our clients had access to a computer or internet. By working with MFI partners like us, Kiva is able bridge the gap and change lives. As we know, commercial banks shy away from rural areas and places which they consider not viable. Most purely for profit MFI also avoid rural area preferring towns and peri-urban centers. For a rural based MFI like ours, interest free loans from Kiva enabled us to extend loans to clients who are marginalized by such mainstream institutions. Because of the challenging nature of this environment, the interest charged although higher than normal, hardly covered delivery costs.