MICROCAPITAL STORY:Opportunity International Emulates Kiva With The Launch of OptINnow

Opportunity International (OI) announced the launch of OptINnow, a project that allows people to donate online funds which will then be disbursed as microloans. The donor selects an entrepreneur online and then chooses how much he or she will donate. The funds are disbursed through the relevant OI microfinance institution (MFI) Kenya, Mexico or the Philippines, with additional countries being added in the future. The minimum donation is USD 25. While the launch of OptINnow was announced on October 21^st, 2008, it began advertising in June, using Facebook and MySpace.

The project is similar to Kiva.org, the first and likely the most famous, person-to-person microlending site, where Kiva acts as a broker between the online funder and an MFI which then disburses the fund to the entrepreneur. OptINnow and Kiva are similar in that they provide a link between funders and entrepreneurs, and that the individual providing the funds chooses the entrepreneur they would like to fund. Also, through both organizations the funders are able to stay informed on the progress of that entrepreneur. There are, however, a few key operational and institutional differences.

The first main difference is that with Kiva the funds are loaned by the initial funder, and with OptINnow the funder makes a donation. In the case of Kiva, once the loan has been repaid, the lender has the option to lend again to a different entrepreneur, keep the money, or make a general donation to Kiva. OptINnow re-lends the loans automatically once the loan has been repaid, however operational expenses restrict information being provided to the initial funder regarding how their funds are used past the initial loan recipient.

Additionally, Kiva utilizes outside microfinance institutions with which they have partnered to disburse the loans directly to the entrepreneur, where OI have their own MFIs in their network which can disburse the loans themselves to new and existing clients. OI owns or controls 42 MFIs in 28 countries throughout Asia, Africa, Latin America and Eastern Europe which have an existing client base of over 1 million clients.

Opportunity International’s press release in Market Watch states that it “owes a debt of thanks to Kiva.org, the pioneer in microfinance online giving”. Kiva provided advice and insight to facilitate the creation of OptINnow and Jessica Flannery, co-founder of Kiva, is a member of the Opportunity International board of directors. No further information on the current or future relationship between OI and Kiva is reported.

Opportunity International was created in 1974 and began as an entrepreneurial microfinance initiative in Asia and Latin America. In 2000 OI expanded its lending capabilities by forming its own formal financial institutions. Opportunity International serves over 1 million people globally. Opportunity International has received funding from and partnered with a number of organizations to expand their work globally, including The Bill and Melinda Gates Foundation, HOPE International, Compassion International, World Relief, the Rotary Club, the World Bank and others. They report to the MIX Market as Market Facilitators and OIs 2007 assets totalled USD 736 million. Past MicroCapital stories on Opportunity International can be found here.

Kiva is a San Francisco-based online micro-lending platform that incorporated in 2005. It has facilitated the transfer of over USD 46 million in loans from over 349,068 Kiva.org users to over 65,000 entrepreneurs in the developing world. Kiva.org partners with 88 microfinance institutions (MFIs) spread across 41 countries. According to Kivafriends.org, an online forum of Kiva lenders, the average repayment rate among all partners is 98.70 percent, and the average loan size is USD 456.20. The minimum lending amount is USD 25. Currently, Kiva lenders receive zero percent interest on their loans, however the loan recipient is charged interest by the disbursing MFI. Microcapital has provided extensive coverage on Kiva’s launch, growth and operations as a non-governmental organization (NGO), including its partnership with VideoJug.

By Lori Curtis, Research Assistant

Additional Sources:

Kiva: “Home“

MarketWatch: “Opportunity International Launches OptINnow“

NazNet: “Kiva vs. OptINnow“

Opportunity International: “Home“

OptINnow: “Home“