It's not as easy as it seems

The emerging world of micro-finance is not free of controversy. There are multiple factors that make organizations and businesses in this field be exposed to increased scrutiny by engaged observers. Some of the issues debates are, for instance, the high interest rates that borrowers have to pay, or how a strong focus on micro-finance can hide the lack of efficient government poverty eradication policies, or the how the overwhelming pressure for borrowers to pay back has led many to suicide.

KIVA, the first online micro-lending platform in the world, knows exactly what I'm talking about. For this blog post, I'm going to be focusing on how it is that KIVA's staff is developing its capacity to keep up with the ever changing challenges that the Web 2.0 brings about while also exploring how they deal with the controversies present in contemporary micro-finance debates.

One of the things that I didn't get to write about in my last blog about KIVA, was its facebook page. There is much being said nowadays about the importance of using facebook as a (free) marketing tool with endless capacity to reach fans around the world (Mashable's facebook week is a great example of this...they have a bunch of great ideas, check it out!). This is what KIVA's facebook looks like:
Pretty decent looking, with 118,559 "likes" and a very engaged audience. Pretty much every post they put up (which they updated often) gets a lot of "likes" and also comments. I saw that they used their facebook page to let users know about the new website that they were releasing -You see it first! Preview the new look of Kiva.org. - a good way to keep users excited about upcoming stuff (indeed, they got 138 "likes" and 14 comments for this post!).

While most of the comments are positive, I came across a couple of negative ones...and unfortunately, did not see KIVA addressing them! Very unusual for a marketing staff that usually gets things right. For example, a very angry user posted the following:
While she did get a response from another user - which usually counts as user interaction towards a the parameters of a successful website - there was no response from KIVA's staff. Rather than addressing the user's concern, by ignoring this comment KIVA is not only losing this one user, but in addition, risks the possibility of losing way more. One of would think that if KIVA is such a successful organization in the field...they would have the right answer to this question, right? Or at least they would be able to address the user's concern.

Nevertheless, on their facebook page there were a couple of instances in which users posing difficult questions were ignored...only when users post about how to make a loan does KIVA respond...That to me, seems like they are "shouting", rather than embracing a main tenement of the groundswell which is to talk, converse with the audience. This, therefore, would be my recommendation # 1 for KIVA: read chapter 6 of the Groundswell and apply the concepts presented therein.

Another analysis that I did of KIVA's facebook page was based on the tips given by mashable (yeah, my obsession with mashable is now fully disclosed). In this article, mashable provides a breakdown of elements of a successful facebook page. Does KIVA have these elements? Well, sort of. I looked at a few of them.

First element, networking with other sites: building a large following requires a network of other platforms, working in conjunction to drive visitors to your fan page ( your organization's website). Unfortunately, KIVA's main website does not have a link to its facebook page. Second element, creating a resource: use the information as added value to have consumers create a connection with the brand. No, I don't think their facebook page has enough resources...again, they're just "shouting": every post is about the organization (and how great it is) and there is no links to useful resources. Third element, creating content that includes participation. Good, they stepped up in this element. They are encouraging users to participate to win a skype chat with Dr. Yunus. They call it "tweet and win" - not bad.


Fourth element, targeting the proper demographic. Let's not forget that understanding the demographic present can help you decide if Facebook is worth it for your business. The mashable article describes how based on data from Quantcast, a tool that allows one to estimate the demographics of a site (among other things), Facebook's users skew towards female youths...53% of users have kids...a majority make over $60k a year salary... 50% are college kids. But I was interested in looking at age:

So...if those are the demographics of Facebook, it would be interesting to look at the demographics of KIVA to see the organization's potential use of Facebook. For KIVA, the age estimations are as follows:

Aja! While most Facebook users are young, the majority of KIVA's users are middle-aged. What this means is that KIVA's Facebook site success will be based on how they are able to target facebook's majority population. Hence, my recommendation #2 for KIVA would be to ensure that marketing strategies take into account specific goals to target younger people. I believe this can be done. After all, teenagers could be interested in making loans too...right? Mashable reminds us that "the demographics that make up Facebook are changing quickly, as more moms have begun to join and the college market has become saturated — so be sure to keep checking up on demographic changes over time. As Facebook changes, your campaigns may need to change with it for maximum effect". Great advise, seriously.

One of the things I'm really curious about is how KIVA is dealing with some of its users concerns about the high interest rate of the loans disbursed by the MFIs that they work with. My attention was caught by KIVA's response following a New York Times article that called out MFI's for making a profit by charging high interest rates. Interestingly, Premal Shal posted a whole article in response providing what I found to be a really helpful Q&A section about the questions raised in the NYT article and particularly about the MFI, LAPO, featured in it. I found this an important response by KIVA, a good way of addressing the issues that can make its users mistrust the organization. It seems that KIVA understands the challenges of high interest rates, but they try to make the users understand that they are trying their best.
I also went on KIVA's new online forum, KIVA friends, to check out if there was some fuzz in there about interest rates and wasn't all that surprised to see a thread that read like this:

Topic: MFI's Extortionate Interest Rates ... up to 58% ! (Read 16296 times)

And, yeah, it was read 16,296 times! This means that KIVA is providing lenders to access a platform in which they can discuss any issues that are relevant to their experience with the organization. Even if they might be fed up with people complaining about high interest rates for borrowers, they are ready to listen to what people have to say.

They are also on board with the whole WIKI revolution. The have their own KIVApedia site, look:
This is what we have been talking about it class - and what Li and Bernoff remind us constantly. There currently exists a larger than ever opportunity ahead of organizations and business in the Web 2.0 world to use social media tools to allow for greater communication with customers. It seems that KIVA knows this which is why my recommendation # 3 would be to continue the good work they have done updating their online platforms so as to include client's input as much as possible.

On my previous blog about KIVA I wrote about KIVA's great response to concerns about transparency. I found another blog that describes the issue a bit more in depth and draws this very important lesson that describes that KIVA is in many ways, doing a good job in terms of its social marketing work. The author of the blog "Beyond Profit" states that when there is some problem "it really matters how you clean up the mess you have created. And Kiva did it with the utmost dignity. Kiva may have erred in its self-representation, but at the end of the day, they handled the criticism admirably. They have changed their communication to improve clarity for donors and have taken a proactive approach to rebuild trust with lenders". In class we discussed the importance of being open and transparent when issues come up...and it seems that KIVA handled what could have otherwise been a PR disaster really well.

What is more, I came across this really helpful powerpoint presentation by Premal Shal, KIVA's co-founder and current president:

Kiva Applying ‘Web 2.0’ To Philanthropy

View more presentations from Cazoomi Technology

Shal talks about how KIVA embraces 4 main tenants of the Web 2.0 principles:

• Create an "addictive" user experience
• Be "radically transparent"
• "Crowdsource" against constraints
  
• Build in "increasing returns on data"
  

I found this presentation to be really helpful because it allowed me to contrast KIVA's performance with the things we discuss in class because we have, indeed, gone over the above-mentioned tenants. Here's how I read Shal's presentation:

• How and why to make sure users stay engaged. Addicted.
  
• Why is openness important (PR strategies). Why trust matters. A lot.
  
• Networking, partnering, sharing resources...more important than ever.
• Measure your success...and use it to be even more successful.

Because KIVA is an organization based on a smart, creative, and unique use of the internet it comes to me as no surprise that they are doing a pretty decent job in terms of their social media presence.

So far it seems that the organization is still the most successful one at what it does. Increasingly, however, others are copying its model. For example, Vittana is taking a similar approach to helping fund education in developing countries by allowing you to lend directly to students in the developing world. As other organization's emerge, it will be crucial to see how KIVA differentiates itself from them. Of course, being the organization that revolutionized the microfinance world they have a head start. But given that things nowadays change at a very fast pace, KIVA will have to work hard to ensure that it's place as the world's largest online lending platform remains untouched.