Analysis Of The Speech Of Muhummad Yunas ( A Microfinancier )

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Motivated by the speech of Muhummad Yunas (a Microfinancier), Jessica and her husband Matt Flannery took a trip to Africa where they discovered that small loans (between $100-$150) could significantly improve the standards of living for people in impoverished nations. They decided to find KIVA as a non-for-profit organization, as means to alleviate poverty and inspire entrepreneurs in developing African countries through crowdsourced microloan financing. Suffering general cash-flow problems since inception, KIVA was able to maintain operations by relying on friends and colleagues as an initial source of funds, and providing them with non-monetary forms of remuneration for services rendered. Following their failure at starting Care 4…show more content…
Field partners then transfer the funds to the entrepreneurs, whom make loan repayments back to the Field partners, which then get dispersed to the lenders through KIVA, where they earn a rate of return and get back their principal amount. KIVA’s small-scale informal business model makes it easier manage and helps to foster a more personal relationship for lenders to feel a greater connection to the person they are helping, with a direct person to person impact encouraging more lenders and a greater success rate. A major advantage to being a non-for-profit are the significant cost savings enjoyed through the use of volunteers as opposed to paid labor, which allows KIVA the ability to offer more attractive small and interest-free loans. KIVA’s emphasis on generosity, human connectedness and community help to reinforce its reputation and to attract organizations that wish to publicly demonstrate their corporate social responsibility. Though there are many advantages to KIVA, most are theoretically based on the business structure, model and mission, and as such can only be actualized if the company reaches a certain level of efficacy; making room for a great number of potential disadvantages. The business model as an indirect P2P lending platform, forces a heavy reliance on partners, participating MFIs and
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