Philanthropy Daily Digest

One Comment

  1. Joanna V says:

    In response to the article: “Contagious Ideas: Crowd-sourced Microfinance and Cooperation in Group Lending,” I definitely think it’s useful for the author to have pointed out that performance of lending portfolios are better when managed by groups than by individuals. However, if we’re thinking in terms of IT strategy it may also be interesting to note Kiva’s ability to harness network effects in attracting so many people to its microfinance platform in the first place. By bringing its funding model online, Kiva has essentially enabled and empowered thousands of users to give in whatever ways they can. Considering the “long-tail” perspective, Kiva is using the internet to harness the purchasing power of a far greater number of people who can give in smaller amounts, and the sheer volume of donations ultimately makes for a significant contribution. Kiva’s online, crowd-sourced lending model is a smart implementation of information technology strategy and the non-profit sector could benefit from utilizing the internet as a platform to achieve network effects and establish economies of scale whenever applicable.