Dowser Interview: Matt Flannery of Kiva
While traveling through Uganda in 2004, Matt Flannery and his wife, Jessica, got the idea to use the Internet to connect poor people in need of loans with those in positions to help. Matt talks to Dowser about growing Kiva from four friends working in their spare time into a multi-national organization that has channeled $100 million in loans to 200,000 micro-entrepreneurs globally.
Dowser: Simply stated, what is the urgent problem you are trying to solve?
Flannery: On the one hand, there are billions of people living in poverty who possess the ability to get out of it if they have the opportunity. On the other hand, there are billions of people who would love to address that problem, but feel disempowered because there is no way for them to get involved. These are the two problems we are trying to solve.
Kiva has a simple mission—to connect people to alleviate poverty. Has it evolved?
Our mission has remained the same – to connect people through lending to alleviate poverty – but our strategies have changed. In the beginning we thought we were just going to work in Uganda, by starting our own microfinance company. Because demand for lending grew, we started working with other microfinance institutions, eventually working with over 100.
Before Kiva, there was no other model for lending money person-to-person over the Internet. What enabled Kiva to emerge?
First, the Internet started spreading all over the world. Second, microfinance became popular. The concept started getting a lot of press and media attention, particularly because Dr. Yunus won the Nobel Peace Prize. And third, PayPal – one of our first and most critical supporters – became a success as a global processor, receiving and giving out money.
Since we started, there have been a number of organizations that have launched just after us or simultaneously. It’s cool that other people were thinking of similar concepts at the same time.
When did you come up with the idea?
It started when I was living in San Francisco in 2004. I was a computer programmer at TiVo. I took a trip to Africa with my wife, Jessica. We were in Uganda interviewing small business entrepreneurs, writing impact reports, and witnessing businesses before and after receiving a loan. We had the idea to write about microfinance on the Internet and to get people involved as investors for small businesses.
In that process, Jessica and I thought of the idea for Kiva together. We wrote a business plan and tried to get funding. A lot of people said it wasn’t a good idea, that it was hard to scale, that it was a long journey. We had the idea in 2004 and launched Kiva a year later.
So, lots of people discouraged you, but who were your key early supporters?
One of the most important was PayPal. They really helped make it possible for us to do this, because they gave us free transaction processing. Foundations, board members, and journalists also helped make this project possible.
You started Kiva with your wife and two friends and now you have a staff of nearly three dozen. What challenges have you faced as you’ve grown?
In the early days, we didn’t have salaries, and were working at night. We started processing hundreds of thousands of dollars, and we didn’t have the infrastructure or the budget to audit all the people who were receiving the money. We corrected it later when we got more resources.
Also, I think when you start a business or a social enterprise, especially as a group of friends, keeping similar values and fun and friendships as you become an institution is difficult. It’s a different vibe.
Did you make sacrifices when you started Kiva?
When we started we paid for expenses out of our own pockets or on a credit card, and we didn’t get paid back when we didn’t make money. There is no chance to get rich doing what we do. I think it’s great that it’s that way, although for some people it may be a sacrifice.
What have you gained from this work?
Friends all over the world – Kenya, Cambodia, anywhere. And I’m doing something that I care about. That is significant.
How would you define ultimate success?
I don’t feel like you get to a point where you can say, ‘Now I’ve reached ultimate success.’ Every time we have a victory, another challenge presents itself. It feels to me like a continuum, like a ladder. It’s a never-ending set of challenges. For me, it’s more about enjoying every day.
What are some of the funny or absurd things you’ve experienced?I was recently on a roundtable discussion with George Soros, Al Gore, and Madeline Albright. We were on ‘Oprah’ and Bill Clinton was there, and that felt surreal.
So many people are willing to lend money through Kiva. Why?
People realize that there’s a real person on the other side who will receive the money – it’s not marketing material. Most people probably already want to help others around the world, but they’ve felt cynical about because it they felt that the money wouldn’t get there.
What keeps you up at night?
Building a self-reliant company that can survive without donations from foundations. The safety of the fellows we send all over the world. Making sure the organizations we work with have a good experience, and that the entrepreneurs are getting the money and are able to follow their dreams.
This interview was edited and condensed.
Photo: Melissa Barnes for Stanford Magazine