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Microfinance in online space: a visual

analysis of kiva.org
Venkataramana Gajjala , Radhika Gajjala , Anca Birzescu &
Samara Anarbaeva
Published online: 16 Aug 2011.

To cite this article: Venkataramana Gajjala , Radhika Gajjala , Anca Birzescu & Samara Anarbaeva
(2011) Microfinance in online space: a visual analysis of kiva.org, Development in Practice, 21:6,
880-893, DOI: 10.1080/09614524.2011.583637

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 Development in Practice, Volume 21, Number 6, August 2011

Microfinance in online space: a visual

analysis of kiva.org

Venkataramana Gajjala, Radhika Gajjala,

Anca Birzescu, and Samara Anarbaeva
Downloaded by [University of Limerick] at 02:48 29 May 2014

Microfinance practices were originally developed in offline contexts. Modern microfinance

practices were based on development models for the financial and social empowerment of
the poorest of poor in developing countries. Several of these practices drew from existing
traditions of money lending within local communities that were reformed to be in sync with
rural development and the empowerment of the underprivileged individual. In present postmo-
dern times, microfinance providers are using online tools in the hopes of broadening the reach
and extending the advantages provided by such a model of micro-lending and micro-borrowing.
In this article, we examine an online peer-to-peer lending and borrowing website, Kiva.org,
which uses online social networking tools in microfinance. The study is thus a close look at
the actual content of the website with a view to understanding the representational practices
of online space through Internet mediated microfinance.

Le microfinancement dans lespace en ligne : une analyse visuelle de Kiva.org

Au depart, les pratiques de microfinancement ont ete mises au point dans des contextes hors
ligne . Les pratiques de microfinancement modernes se fondaient sur des mode`les de develop-
pement pour lautonomisation financie`re et sociale des plus pauvres des pauvres dans les pays
en developpement. Plusieurs de ces pratiques sinspiraient de traditions existantes de pret
dargent au sein des communautes locales qui ont ete reformees de manie`re a` etre en harmonie
avec le developpement rural et lautonomisation de lindividu defavorise. A` notre epoque post-
moderne , les prestataires de microfinancement ont recours a` des outils en ligne dans lespoir
delargir la portee et detendre les avantages fournis par un tel mode`le de micro-prets et de
micro-emprunts. Dans cet article, nous examinons un site Web de pret et demprunt entre
pairs en ligne, Kiva.org, qui emploie des outils en ligne de reseaux sociaux dans le contexte
du microfinancement. Cette etude est donc un examen minutieux du contenu du site Web,
dans le but de comprendre des pratiques representationnelles de lespace en ligne a` travers
le microfinancement obtenu par lentremise dInternet.

Microfinancas no espaco online: uma analise visual da Kiva.org

As praticas de microfinancas foram originalmente desenvolvidas em contextos offline. Praticas
modernas de microfinancas estavam baseadas em modelos de desenvolvimento para o empo-
deramento financeiro e social dos mais pobres nos pases em desenvolvimento. Muitas destas
praticas foram extradas de tradicoes existentes de emprestimo de dinheiro dentro de comuni-
dades locais que foram reformadas para estar em sintonia com o desenvolvimento rural e o

880 ISSN 0961-4524 Print/ISSN 1364-9213 Online 060880-14 # 2011 Taylor & Francis
DOI: 10.1080/09614524.2011.583637 Routledge Publishing
 Microfinance in online space

empoderamento dos indivduos desfavorecidos. Em epocas atuais pos-modernas, os prove-

dores de microfinancas estao utilizando ferramentas on-line visando ampliar o alcance e esten-
der as vantagens oferecidas por tal modelo de concessao de emprestimo em nvel micro e
tomada de emprestimo em nvel micro. Neste artigo, examinamos um website de concessao e
tomada de emprestimo online par-a-par, o Kiva.org, que utiliza ferramentas de rede social
online em microfinancas. O estudo, entao, faz uma analise minuciosa do conteudo real do
website tendo em vista compreender as praticas de representacao do espaco online atraves
da microfinanca mediada pela Internet.

Las microfinanzas en el ciberespacio: un analisis visual de Kiva.org

Originalmente las microfinanzas se desarrollaron en un contexto no cibernetico. Las practicas
modernas de las microfinanzas se basan en modelos de desarrollo para empoderar en lo finan-
ciero y en lo social a los mas pobres en los pases en desarrollo. Varias de estas practicas pro-
ceden de las tradiciones de prestamos que ya existan en las comunidades locales y se
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transformaron para estar en sintona con el desarrollo rural y el empoderamiento de las per-
sonas en desventaja. En estos tiempos posmodernos, quienes proporcionan microcreditos
utilizan herramientas ciberneticas en un intento de divulgar mas las ventajas de esta modali-
dad. En este ensayo, los autores analizan un sitio web de prestamos entre pares, Kiva.org,
que utiliza herramientas de las redes sociales en lnea para ofrecer microcreditos. El ensayo
revisa con detalle el contenido de este sitio web para entender las practicas representacionales
de los espacios ciberneticos a traves de las microfinanzas en Internet.

KEY WORDS : Aid; Labour and livelihoods; Globalisation

Introduction
Microfinance may include microloans and other types of financial services like savings
accounts, insurance and collection of periodic loan repayments. It may also include the pro-
vision of social services such as basic healthcare. The loans are small (typically less than
US$200) and the objective of the loan is to enable the clients (often women) to establish or
develop a small self-sustaining business. For instance, a woman entrepreneur could borrow
US$50 to start a poultry farm (GDRC n.d.a: para. 7). Currently, microfinance institutions
serve only a fraction of the potential market: according to the estimates of the Microcredit
Summit, nearly US$22 billion would be required to meet the potential demand for microfinance
products from 100 million of the worlds poorest (GDRC n.d.b: para. 2).
Our research objective in this paper is to examine how the delivery and use of microfinance
products has changed following the use of ICTs for microfinance, via a case study of Kiva.org
(Kiva) an online peer-to-peer lending platform focused on investment in developing
countries. Specifically, we use textual and visual analysis to study the actual content of the
website with a view to understanding the socioeconomic processes involved in an Internet-
mediated way of doing microfinance.

Background
In this section we provide a background to microfinance in offline contexts, an introduction to
the development of online social networking, and finally a background to Kiva.

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 Venkataramana Gajjala, Radhika Gajjala, Anca Birzescu, and Samara Anarbaeva

Grameen Bank (one of the earliest microfinance institutions) started in 1976 with Muhammed
Yunus giving US$27 from his own funds to 42 bamboo stool makers, and soon became extra-
ordinarily famous for offering microcredit to women in small groups. Grameen targeted the
poorest of the poor those earning less than a dollar a day. The conventional wisdom that
the poor were not creditworthy and lacked collateral was successfully challenged by
Grameen Bank via the use of the group lending model (or the joint liability contract) which
involved the monitoring of members by their peers in the group at weekly public meetings.
Typically, the way it works is as follows: borrowers organise themselves into groups of five
and approach the bank. The first two members of the group are given a loan after the group
as a whole agrees to abide by the Bank rules. If the first two do not default on their loan repay-
ments, the next two are given a loan offer after a month or so and after another month, the last
member of the group is finally given a loan offer. The availability of future credit is dependent
on whether or not all members in the group repay their loans even one errant member will
result in a denial of credit in the future to the entire group. In addition, transparency in the grant-
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ing of loans and societal peer pressure for prompt repayment is ensured via the creation of
centers consisting of eight groups of Grameen borrowers where loan repayments are
collected publicly in a group summit. The loans that were granted initially were small
(usually less than US$100) and necessitated weekly repayments (which helped in picking up
any problems early on) that were equivalent to an annual rate of 10 per cent (Sengupta and
Aubuchon 2008: 28). The group lending model therefore replaced the collateral demanded
by the pawnbroker.
Apart from the Grameen bank group model there are other types of credit models in micro-
finance: (a) the formal models of banks, cooperatives, credit unions and insurance companies,
(b) the semi-formal sector of NGOs and (c) the informal sector consisting of moneylenders and
pawnbrokers (Kirkpatrick and Maimbo 2002). In addition, there are ROSCAs which . . . are
built on informal understandings among friends and acquaintances (Armendariz de Aghion
and Morduch 2007: 58).
The concept of microfinance, which initially evolved from the economic development para-
digm, thus now exists in two different spheres: poverty alleviation and economic viability.
These two objectives are not necessarily mutually exclusive but may be competing with each
other at times. On the one hand, it can be argued that microfinance institutions require oper-
ational efficiency at the minimum, i.e. to break even; while on the other hand, they may be
deemed to require full self-sufficiency or profitability (GDRC n.d.c: paras 2 & 3). For-
profit microfinance has been growing fast, including in India where SKS, a lender created by
Vikram Akula, a former McKinsey partner, is backed by Sequoia, a leading Silicon Valley
venture-capital firm (The Economist 2008).
Some recent rends in the microfinance sector are as follows. First, technology can be used to
minimise transaction costs (microfinance institution operations are currently very manpower-
intensive) and minimise the margin of error, in addition to standardising products and oper-
ational processes (Akula 2008). Akula (2008) further states that a loan officer who has 450
customers with two products each must make 2,700 manual entries a week or more than
140,000 a year which coupled with the low skill levels of the workforce led to his company
(SKS) digitising the process. Second, microfinance institutions also need to build customer
loyalty by focusing on customer friendly approaches. Third, microfinance institutions have to
expand microfinance beyond credit into other financial products like savings, flexible loan
repayments and insurance. For instance, Grameen Bank has reinvented itself by incorporating
more savings schemes, flexible loan repayments and a pension fund which all function as a form
of insurance. BASIX, an Indian microfinance institution, provides basic life insurance and other

882 Development in Practice, Volume 21, Number 6, August 2011

 Microfinance in online space

products targeted towards its agricultural clients, particularly insurance against drought or
loss of cattle.

The link between online social networking tools and microfinance

Various grassroots organisations have linked independent indigenous producers to global markets
through microfinance programmes which use online networks for buying and selling and adhere to
fair trade principles. For instance, Suvyapar, which connects rural artisans to US consumers,
initiated through Stanford Universitys digital vision, programme claims that through their micro-
finance programme they are able to pay artisans more than twice as much as they might earn from a
corporate chain (Devasher 2003). In this paper, we look at Kiva, a peer-to-peer micro-lending
website which acts as an intermediary to bring the borrower and the lender together. Kiva partners
with microfinance institutions to identify qualified potential borrowers (entrepreneurs) and lenders,
who channel loans to the borrowers through payment online to Kiva. Founded in 2005 and head-
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quartered in San Francisco, Kivas mission is to connect people, through lending, to alleviate
poverty. More than half a million people have loaned over US$76 million to 180,000 entrepreneurs
in 45 countries through Kiva with a current repayment rate of 98 per cent (Kiva launches online
microfinance in the United States 2009).
Much early offline microfinancing was focused in small local communities with links that
were invisible or only partly visible to users if and when any links existed to global
finance and international NGOs. Since then, peer-to-peer lending sites such as Kiva, Micro-
place, DhanaX, MyC4, RangDe, Investors Without Borders, and Globefunder India have
added variety to the choices available to socially conscious investors in the developed
world by directing their funds to borrowers in developing countries (Ahmad et al. 2009).
Holahan (2007) describes Microplace.com as a website launched by Tracey Pettengill
Turner that lets small investors provide low-interest micro loans, of US$50 or more, to
would-be small business owners which benefits from the lessons eBay has learned working
with small business owners and consumers who buy and sell on its family of sites. On the
other hand, the founder of Etsy an e-commerce website focused on handmade and vintage
items Rob Kalin has cited Muhammad Yunus as an inspiration (Rokai 2008). As the
Aqute Research blog reports:
this desire for connecting with small craftsmen and merchants [in online micro-lending
ventures such as Kiva] is similar to Etsy, so much so that eBay has invested in its own
microfinance website, Microplace. Not that the borrowers need to come with the
do-good appeal of living in a developing country: lending to peers in developed countries
is also proving popular (in the UK, we have Zopa). (Aqute Research n.d.)
As stated earlier, these online sites shift the microfinance concept into the global visual and
communicative spaces of the online social networking models popularised in web 2.0 Internet
culture relationship building is modeled on the lines of sites such as Facebook, Myspace and
Etsy. In this paper, we look at a specific site, Kiva, much acclaimed for its use of online tools in
micro-lending.
We studied the site about four years after it was first launched online in 2005. We approached
this study through methods of textual analysis and visual analysis while critically engaging with
the content and its seeming social implications. We used our knowledge and involvement
in development contexts offline in first world and third world locations to assist in our examin-
ation. This study is thus a close look at the actual content of the website with a view to
understanding the socioeconomic transactions and processes that contribute to an Internet-
mediated way of doing micro-lending and borrowing.

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 Venkataramana Gajjala, Radhika Gajjala, Anca Birzescu, and Samara Anarbaeva

The Kiva model

In terms of Kiva and the microfinance model, Sengupta and Aubuchon (2008: 28) insightfully
grasp the model of micro-lending Kiva stands for when they assert that
Kiva.org allows individuals to choose a business, originate their own micro-loan, and
in return receive electronic journal updates and payments from their borrower . . . but
the lender does not receive any interest on their loan. Rather, journal updates and pro-
gress reports serve as interest, letting lenders know that their money has been put to
good use.
Kiva is one of the pioneers in the provision of microfinance it is a person-to-person micro-
lending website which lets individuals lend money to specific entrepreneurs in developing
countries. The objective is to empower these entrepreneurs, which will eventually lift them
out of poverty. Referring to the growth and development of microcredit and microfinance
sector, Sengupta and Aubuchon (2008: 28) argue that Kiva, through frequent and extensive
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mass media exposure, renders the microfinance movement as accessible to lenders as the
Grameen Bank made microcredit accessible to borrowers.
Kivas members consist of individuals from developing countries who are in need of funding
for their small businesses to enable them to make a livelihood. While browsing through the
entrepreneurs profiles on the site you can choose someone to lend money to, and thus help
that individual achieve economic independence (Loans that change lives, n.d.). The loans
made through Kiva usually take 6 to 12 months to be repaid during the period of the loan
you can get email updates and thus track periodic repayments. Once your loan is repaid, you
can lend to another person who is in need.
Kiva also works with specialised microfinance institutions in order to gain access to deser-
ving entrepreneurs from impoverished communities around the globe. These entrepreneurs are
usually from developing countries, and have a plan to build or expand small businesses, but do
not have the funds to get started. The most qualified entrepreneurs thus are chosen locally
through the services of these institutions. Each microfinance institution has a process of its
own that determines how these qualified entrepreneurs are selected. The specialised microfi-
nance institutions that Kiva partners with are responsible for uploading their newly discovered
entrepreneur profiles on to the Kiva site, where people can view the pictures, descriptions, and
make decisions about whom to lend money to.
Through Kiva, not only do people lend money to help those in need but they also have the
opportunity to connect and potentially to build relationships. Loans vary in their sums and
can start as low as US$25, but the effect of this amount can change the loan recipients life
forever. The Kiva website periodically has a featured entrepreneur with a profile. A prospective
lender can read about this individual and lend money if he or she wishes to do so by choos-
ing the amount in the drop box and clicking lend now. Kiva also encourages its microfinance
institution partners to promote latent entrepreneurial skills amongst the poor by providing train-
ing and other assistance. In addition, Kiva has links to an online store, which sells goods ranging
from gift certificates to items with the Kiva logo on them.
What Kivas networking practices seek to achieve is raising social consciousness among indi-
viduals who are in privileged locations compared to the micro-entrepreneurs in the developing
countries, who are given the chance to look at the harsh economic situation outside their every-
day reality and to exercise social responsibility firsthand. To assist in this, there are features
such as the community forum, which lists the number of loans, number of team members,
the names of team members, and the total amount loaned in that particular thread. All these
teams form Kivas extended network. The Kiva community thus includes various categories

884 Development in Practice, Volume 21, Number 6, August 2011

 Microfinance in online space

by which teams of lenders are organised, which range from Alumni Groups to Memorials
and Religious Congregations to Sports Groups.
One can also read the journals of the members online. These journals provide member
descriptions, profiles, and pictures. Each member has ratings and recommendations. The
timely repayment of a loan results in good recommendations and ratings which then improves
that individuals chances of getting more loans in the future. An individual can do many things
on Kiva become a supporter, become a voluntary fellow (including the opportunity to visit
entrepreneurs in their home countries and witness microfinance firsthand) and a microfinance
institution can become a field partner.
The duty of Kiva fellows is particularly important, since, as independent volunteers, they
chronicle, case-by-case, the impact and results that the loans have on the economic status of
the borrowers, hence satisfying the main condition of Kiva, namely client impact transparency
on the Internet. The Kiva interface and interactive technical tools that link various local sites to
a global space seem to be successful from what we see online at the site in developing a
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sense of community ethics and thus of re-sensitisation of the privileged towards poverty.
The network approach strengthened by Kiva fellows offline local activities also seems to
help in tackling the barrier between lenders and borrowers and the quite remote, abstract
notion that the lenders of material privilege might have of economically disadvantaged
people from other places. Further, the actual impact of the loans on borrowers lives is estab-
lished by means of web 2.0 tools that the Kiva fellows make use of in their activities (e.g. blog-
ging, video interviews with the borrowers and so forth). The goal of this visualisation of the
actual impact of the loans through online text and imaging is to show lenders that these
loans are not just a drop in the ocean.
A paragraph from a Kiva fellows journal in Peru (22 March, 2009) explains the importance
of journaling:
Because a picture is worth a thousand words (or at least US$25 minimum loan!) and the
photos on Kivas website that are taken of the women in their place of business, which is
often their home as well, is what Kiva lenders have repeatedly indicated is what they want
to see. While going to the community bank meetings assures that the women will be
present, it doesnt allow their photos to be taken in their individual places of business.
(Sweeney 2008)
Indeed, the main theme throughout the fellows online postings is precisely the narrative of the
impact of the loans on the individual entrepreneurs. This is a way of showing the results of the
borrowing and at the same time a way to assure the individual lenders that their loans have been
put to the best possible use and to persuade other possible lenders to take part in the microfi-
nance initiatives. As many lenders write in their profiles on Kiva, they became aware that
person-to person microloans do bring sustainable positive economic changes for the borrowers.
The following is a sample description of a person who needs a loan from Kiva. The
businesses description on the website is accompanied by a picture of the individual alongside
his or her business:
Lin Char, 27, owns a brickfield used to make charcoal. He sells the charcoal from his
house and sometimes customers come to buy at his house. He is married with two
teenage children. His wife works as a local farmer and sells desserts out of her home to
the neighborhood. Char is applying for a loan to increase his business capital. (Lin
Char 2009)

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Kivas use of web 2.0 technology in microfinance

So far we have closely examined the features available on the website and talked about what
appears to be the positive potential of using online social networking tools in order to create
a global space for various local agencies and individuals to network and use the concept of
microfinance. In this section, we move on to a critical examination that suggests possible unin-
tended social consequences and social impacts of such a space.
For instance, speaking about the momentum the organisation is gaining, a Kiva fellow in
India stresses that:
Kiva connects people who have money to people who dont have money via the Internet.
We envision Kiva to be the largest database of people who need loans and good people that
have money to be able to facilitate those loans. (The Internet Archive n.d.)
From the outset, it goes without saying that Kiva fosters networking, which indeed increases
the exposure of borrowers profiles to a large audience. However, the networking fostered does
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not place all users on equal footing, as do, for instance, social networking websites such as Face-
book, where there is a single profile format. This lack of social equality comes from the econ-
omic inequality of the borrowers and lenders. This is so because, as is common knowledge,
microfinance practices are a response to economic inequality. The dilemma posed when this
is brought into online formats is a dilemma based in multiple levels of access, not only to
the technology and actual literacy in global languages (English, in this case) but also through
the seemingly necessary unequal positioning through the visual interface. We merely state
this problem as a dilemma that needs to be noted and further examined in order to see how
those who intend to mobilise online technologies for socially conscious projects develop
better representational practices.
In the case of the borrowers, there is a linear information flow, involving a three layered
mediation of the representation of the borrowers. The first layer involves the vetting process
that classifies him/her as adequate to be a borrower by the local microfinance. The second
layer of representation is through the Kiva fellows descriptions and narratives on the
website. The third layer of representation comes from the Internet tools themselves that
serve as filters which shape the final representation of the borrower to potential lenders and
the world at large. In comparison, by the sheer fact of direct access to computers and the Internet
that lenders have, they are far more in control of negotiating the representation of the borrowers.
Thus, implicit and explicit choices are made and structured through the design of the website
and through the hierarchies of access and literacy that affect users. This impacts the represen-
tation of the borrowers and lenders profiles. This study used the identification of presences and
absences within the profiles and narratives to help us see the limitations of this online system.

Method
We randomly selected 30 profiles on Kiva (15 lenders and 15 borrowers) and used content
analysis (White and Marsh 2006) and visual analysis to examine text and photos. An initial
click on a featured lender or borrower would lead us, in turn, to a number of other lenders or
borrowers who were linked to each other thus revealing a network of relationships. To criti-
cally analyse profiles visually and textually, we asked questions such as: How are the lenders
and borrowers represented in these images? How are they similar or different? What do the
images tell us? We looked in depth at the profiles and messages that were posted. We also jux-
taposed the lender and borrower profiles by contrasting the two.
In what follows we discuss a few of the profiles we examined.

886 Development in Practice, Volume 21, Number 6, August 2011

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Figure 1: Adwoa Nyamekye, Kiva borrower

Source: Kiva.org (2007), used with permission.

Adwoa Nyamekye is 45 years old. She is a married woman with two children. Both are cur-
rently in senior high school. She lives with her husband and children in a rented apartment
in Nkawkaw, in the Eastern Region of Ghana. Her husband is a farmer.
Adwoa works to make some income to support her husband financially. She trades in food
items such as tomatoes, corn dough, pepper, etc. on a table top in the market square. She
procures the goods from wholesalers in nearby towns at cost effective prices. Adwoa sells
the products mostly to food vendors in her community. She has been in business for ten
years. She wants a loan to procure goods in bulk to maximize her profit margin. She
aspires to improve upon her living standard and support her childrens education.
(Adwoa Nyamekye 2009)
In the associated image that represents Adwoa, we see a middle-aged black woman sitting on
the bottom of the stairs in a white plastic chair. Adwoas hands are clasped together. She is
wearing a green dress with white flowers and is accessorised with gold jewellery (watch, brace-
let, necklace with matching earrings). She is looking down in the picture, and her eyes are semi
closed. Her face does not reveal any emotion, nor is she looking at the camera. Further, she is
not shown as active and in control but rather as passive and waiting.
Adwoas profile description starts with her age (45) and marital status (heterosexual, married
with two children). This is important at the outset, because the potential lenders who visit the
site are about to be asked for a loan not just for her but for her family as well (appealing to a
Western sense of family values). Her children are in high school, and this implies that they
may need money for college soon her profile says that she wants to support their education.
Also, the mention of her rented apartment is important here, because we know she cant afford
to buy a home, therefore she rents. Even though it says that her husband is a farmer, we learn
later that she works hard to support her husband financially implying that she is the breadwin-
ner in the family. Then her profile describes her business trading foodstuff in the market
square at a higher price than she purchased them for. More importantly, she has been in business
for ten years, implying that she has created sustainability for herself and is a reliable borrower.
By taking the loan she wants to improve her living conditions and provide education for her
children. Providing income security for her family and supporting her childrens education is
an important reason for her taking the loan this is stated at the end of her profile.

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 Venkataramana Gajjala, Radhika Gajjala, Anca Birzescu, and Samara Anarbaeva

This profile emphasises family values and needs; therefore, the lender is more likely to pay
attention to her profile and be more likely to give her a loan. It paints the view of a woman who
is trying to provide for her family. This may potentially go a long way in getting the emotional
buy in from potential lenders. However, the image that is meant to be persuasive to the lender
from the affluent world, serves to inadvertently portray the image of a borrower from the third
world as an object of charity rather than as a budding entrepreneur.
Lenders on Kiva can lend individually and simultaneously be part of lending teams with
varying objectives which bring people together. Kiva thus seems like a community brought
together with the main objective of lending to entrepreneurs from the developing world,
which in turn is made up of numerous sub groups. For instance, there is the Europe team,
the Obama team, the GLBT team, and so forth. Further, there are instances where
teams communicate a combination of Kivas overall goal and their own, such as the one
described in the We loan because section from the Obama team profile page: Everyone,
everywhere who understands that Barack Obama combined with our individual efforts
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through Kiva will help make this world a much better place! (Team Obama 2008), or in
the About section of the Kiva Christians team: We loan because: Pure and undefiled reli-
gion before God the Father is this: to care for orphans and widows in their misfortune and to
keep oneself unstained by the world. (Jam. 1:27). About us: A group of believers in Jesus
Christ, brought together through a common purpose: to help those in need around the
world (Kiva Christians 2008).
Lenders profiles, in both verbal and visual texts, often reveal the assumptions underlying
lenders decisions to make loans, their perspectives on Kiva, and implicitly, their take on the
more general development paradigm.
Sometimes, the information presented in the profiles (photos, About, I loan because and so
on) reveal lenders motivations. For example, in one profile photo shows one of the two lenders
from the developed world (mentioned in the Location section) surrounded by seemingly poor
children while the other holds an African child in his arms this seems to suggest that they are
motivated by a desire to save the poor.
As one briefly navigates through Kiva lenders profiles, one can tentatively visualise (without
making any generalisations) a common socio-economic prototype of a Kiva lender as belonging
to the middle class in a developed country, and who is either working or has recently retired.
One line in one We loan because section is revealing with regard to the socioeconomic
categorisation of lenders on Kiva: Because its a perfect example of what capitalism could
be if more average Joes could get involved (Howard & Maureen 2008).
Profile information also contains lenders short personal narratives and biographies. The
personal, intimate nature of such information renders the lenders aim of participating in the
Kiva enterprise even more genuine. One often comes across young couples lending on Kiva
whose profiles reveal the reason for their involvement in this online microlending model. For
instance, Kristina and Michael, a young Texan couple, loan because: Our Dad (dad in law)
taught us by example to give back and that entrepreneurship can change lives for the better.
We are loaning in his honor (Kristina & Michael 2008).
In another example, Howard and Maureen, a recently retired couple from California, explain
how they have used income from their post-retirement job to finance these loans. In addition,
visitors to the website discover that one works as a singer entertaining groups of senior citizens
in the San Francisco Bay area a snippet of personal history that gives the whole Kiva lending
enterprise a human touch.
The following picture and information is taken from the profile of a multicultural lender
couple, Nicole and Hiren, from the state of Ohio in the USA (Nicole and Hiren 2007):

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 Microfinance in online space
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Figure 2: Nicole and Hiren, Kiva lenders

Source: Kiva.org (2007), used with permission.

Occupation: Shiny, Happy People

I loan because: Were blessed to be able to help others.
About me: Hiren helps make investment decisions for a pension fund. Nicole writes,
teaches English to speakers of other languages, and makes jewelry.
Check out our loan map at tinyurl.com/2pz6pr. If youd like to do your own loan map like
this, please see this thread on Kiva Friends: www.Kivafriends.org/index.php/topic,1301.0.
html
Join Kiva lenders from around the world at www.KivaFriends.org (Nicole and Hiren
2007).
Nicole and Hiren describe themselves as happy, shiny people and they look like a happy
couple in their picture. They appear to be Ohio State football fans and are wearing Ohio
State gear, and are posing and smiling for the camera. By putting up this picture on Kivas
website they appear to be projecting an image of a fun-loving couple. There is not much in
their profile that says anything more than what has already been conveyed by the picture, i.e.
that they are from Ohio and they are happy shiny people. Further, they say that they lend
because they are blessed to be able to help others. In their profile, Hiren and Nicole also
mention their professions Hiren is an investment advisor while Nicole is an English
teacher in addition to being a jewellery maker.

Visual and social impact

The knowledge and representations evident in the profiles, described above, can be more
thoroughly understood when taking into consideration their implications in global social
relationships, which are based on inequality. Several discursive formations should be paid atten-
tion to as they are marked out in the Kiva profiles. On the one hand, there is a long-standing
paternalistic rhetoric underpinned by a Western ideology of progress and development
with regards to third world societies. On the other hand, there is a rhetoric of identity construc-
tion which is engaging a Westernised multicultural middle-class. This takes shape through
the establishment of categories of difference precisely through a sustained representation of
the borrower as fairly vulnerable. At work here is a practice of unidirectional cross-cultural

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 Venkataramana Gajjala, Radhika Gajjala, Anca Birzescu, and Samara Anarbaeva

encounters which encourages and reinforces a Westernised gaze at the third world, but
implicitly and even unintentionally denies respect and empowerment for the borrower
within this online global space.
Through the visual and textual representations on Kiva, we see that a modern global middle
class seems to be undertaking the charitable mission of assisting and saving the poor in the
underdeveloped world. Kiva thus looks like an appealing twenty-first century version of
faith-based missionary work. As argued in a comment posted on a blog about Kiva, what
Kiva captured so well was the immediacy our culture thrives on, seen in countless ways and
now through charitable giving-instant-gratification (give, be connected, see the instant
results) (Chang 2008).
However, the new image of the philanthropic affluent country native becomes more appeal-
ing to modern citizens in this setting, since it is strongly anchored in a global framework. Thus,
for the sake of persuading other prospect lenders, a Kiva fellow argues that Youre a venture
capitalist when youre on Kiva . . . you are financing somebody who is an entrepreneur in the
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developing world (The Internet Archive, n.d.). Likewise, the founder of Kiva, Matthew
Flannery, states that:
the real solutions to poverty alleviation hinge on bringing capitalism and business to areas
where there wasnt business or where it wasnt efficient . . . This doesnt have to be charity.
You can partner with someone whos halfway around the world. (Kristof 2007a)
Yet, as we have pointed out through our study of the design and visual setup of the website
along with the journals from the local microfinance institutions and volunteers the site does
give the image of charity to the developing world.
This critical take on Kivas online discursive practices is not meant to belittle its mission and
its visible positive outcomes in the microfinance realm, but comes as a necessary cautious
scrutiny which complicates the role and the position of Web 2.0 tools within the development
paradigm.
To the extent that Kiva expands the debt capital for microfinance institutions, its network-
ing practices help increase the chances of entrepreneurs in economically weaker locations
(those who have been screened and approved for loan disbursal by the microfinance insti-
tutions) to get loans via the exposure of their cases to a much larger audience than would
be possible in an offline context. Also, as Kristof (2007b) points out, when we compare
Kiva to aid groups whose structure often involve top-down decisions, incredible bureaucracy
and paperwork, we can see that Kiva does avoid such bureaucratic layers. Therefore, the fact
that Kiva avoids expensive aid bureaucracy by lending directly to people who are screened
only by groups with an all-local staff constitutes a step forward (Kristof 2007b). Although at
first glance it seems as if Kiva has succeeded in lowering one component of the transaction
cost the multiple layers of bureaucracy involved in traditional aid relationships a
more detailed investigation is required, to assess if the costs of microfinance institutions
for the identification of borrowers, loan appraisal, disbursement and monitoring repayment
has indeed been reduced.
The paradox regarding Kiva is that the organisation faces an extremely unusual challenge:
maintaining adequate supply (people who need help) to meet the demand (people who want to
give it) (Walker 2008). A New York Times journalist quotes Kivas public relations director,
Fiona Ramsey, who states: We dont want people coming to the website who want to make a
loan and theres no one to loan to (Walker 2008). The reason for the scarcity of micro-
entrepreneurs is the lengthy process of vetting the prospect borrowers carried out by the
local microfinance institutions. The unusual dynamic of Kivas outreach to the lenders leads
some users to get so caught up in helping that they behave like collectors, looking to add

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 Microfinance in online space

new countries and new kinds of businesses to their portfolios (entrepreneurs in Iraq and
Afghanistan are particularly popular) (Walker 2008).

Conclusion
The analysis of Kiva representational practices shaped by digital tools, and specifically by
online social networking technologies is not meant to discredit its mission and its visible out-
comes in the microlending domain; instead, it attempts to complicate and problematise the
place and role of ICT within a development paradigm influenced by social networking.
Microfinance has been continuously evolving, with peer-to-peer online lending portals leading
the transition to the online context. In addition to diversification of products microfinance today
includes financial services like savings and insurance and may also include social services such as
basic healthcare, the delivery and use of microfinance products also continue to evolve with peer-
to-peer online lending portals leading the transition to online content.
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The authors
Venkataramana Gajjala is an Associate Professor at Tiffin University where he teaches courses in
Management, Finance and Entrepreneurship. He has also taught at the University of Hyderabad in India
and works with Microfinance institutions such as BASIX. He is a researcher of Entrepreneurship and ICTs.
Radhika Gajjala (corresponding author) is Professor and Director of American Culture Studies at
Bowling Green State University. She teaches and researches on topics related to digital media and globa-
lization. For more on her work see http://personal.bgsu.edu/~radhik ,radhika@cyberdiva.org.
Anca Birzescu is a Doctoral Candidate in the School of Media and Communication at Bowling Green
State University. Her research interests include postcolonial theory, feminist cultural studies, ethnic iden-
tity, gender and communication, and mass media discourse in Eastern and Central European transitional
societies. Her current doctoral research focuses on Roma minority identity negotiation in post-communist
Romania.
Samara Anarbaeva is a Doctoral Candidate in the School of Media and Communication at Bowling
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Green State University. Her research interests included digital media, social network systems, intercultural
communication and ethnic identity. Her current doctoral research examines ethnic identity and gender in
youtube do-it-yourself fashion videos.

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