The NY Times recently wrote about how Kiva.org has a supply/demand problem. Too many donors, not enough people to give the money to. Caroline Heine on PhilanthroMedia writes today , “the inability of Kiva.org to keep pace with its own success is just one more example of the problems caused by the absence of a “true” social capital marketplace.”
I think Kiva’s problems are a great example of how strongly donors respond when social capital markets are created. I believe figuring out how to connect donors and nonprofits via marketplaces will result in temporary supply/demand imbalances. This is a normal reaction to creating liquidity in a market that did not have it before.
Grameen, the microfinance organization founded by noble peace prize winner Muhammad Yunus opened offices in Queens, NY recently. Kiva’s problem is not that there are too few people in the world who need microfinance, but that they’ve turned on the supply spigot and need to figure out how to turn on the demand spigot.