There’s been a bit of an ongoing debate about whether or not Kiva is what it seems. *cue ominous music* First, a post by David Roodman, followed by a response from Kiva co-founder Matt Flannery. More recently, Stephanie Strom wrote an article in the New York Times, to which Matt Flannery has also penned a response.

All my friends have been asking me what I think about this. My inbox is bursting with emails, my Twitter feed is … well, atwitter. Meanwhile, I never knew when I signed up to represent Kiva for 10 weeks in Indonesia that I was also signing myself up for a much longer-term commitment as a Kiva Ambassador. But all jesting aside, as someone who has gone behind the curtain and seen the inner workings of Kiva and one of their MFI field partners, here’s my own personal opinion (not endorsed in any way by Kiva) on whether or not Kiva is actually peer-to-peer microlending.

A Kiva lender and borrower are connected because:
- The lender ties the fate of hir money to the borrower’s ability to repay. In other words, if Wayan Puspa in Bali gets a bad harvest, Bob Smith in Idaho won’t get his $25 back. This is why Bob gets updates on Wayan’s business — because Bob has effectively invested his money in Wayan’s business.

A Kiva lender and borrower may be connected as follows:
- Wayan Puspa may not know about Bob Smith or Kiva being the source of her funds. This largely depends on the MFI Field Partner that’s handling the loan on the ground. I know Kiva Fellows who have gone out into the field with printouts of Wayan’s borrower profile and have shown Wayan the names and faces of all the people who have contributed to her loan, to everybody’s delight. I know that clients have made videos to thank their lenders personally. But there’s no guarantee that this will be the case.

[On a personal note, I wanted very much to do this but I couldn't, because (1) Many Kiva lenders put pictures of their pets on their profiles, and my clients would have been offended by the idea of borrowing money from a dog, and (2) In the religious environment in which I was operating, I did not trust myself to be able to respectfully and sensitively explain to borrowers and MFI staff members that their funds were coming from atheists and LGBT people -- I struggled a lot with this. Despite this, all clients still sign a waiver saying at minimum that they understood that their personal information and images were going to be made public for fundraising purposes, and that they are okay with that.]

A Kiva lender and borrower are not connected in the following way:
- Wayan Puspa usually has already received the loan by the time the fundraising on Kiva happens. Kiva funds will reimburse/guarantee the money that the MFI fronted for Wayan Puspa. If many loans posted on Kiva end up not getting funded, the MFI might not be able to make loans to future clients, but it won’t be able to withdraw a loan that’s already been made.

Overhead You don’t donate through Kiva — you loan. Your entire $25 (or whatever amount) goes to the MFI Field Partner and is earmarked for the borrower. None of this money goes towards operational costs, not for Kiva nor for the MFI Field Partner. Kiva does ask for an optional donation to cover their administrative costs, but this is by no means mandatory. Currently, the suggested donation is 15% of your loan amount, or $3.75 for the usual $25 loan, which most lenders are happy to give.

Transparency The date in which every loan is disbursed is listed on the borrower profile, and you can see that in most cases, the disbursement predates the fundraising on Kiva. Check out this example, in which a profile was posted on Kiva 5 days after the loan was disbursed. The How Kiva Works page has more details.

My take At the end of the day, you’re still investing your money in someone else’s livelihood. I think of it like swiping my credit card to pay for something. I’m still liable to pay for it, even though the details are complex and no money will leave my account for another 30 days. Kiva has channeled $100m in funds to microentrepreneurs in only 4 years. There’s no way that would be possible without working with their MFI field partners, and without operational abstractions that strike a difficult balance between creating a personalized user experience and maximizing efficiency.