As noted by others, there is a lot of currency risk and other legal issues which makes Bitcoin a difficult proposition for Kiva.

For those worried about interest rates, I understand why you might initially find some of the high interest rates to be appalling at first glance, but a simple explanation should help you understand why they are that way in some places.

Let's take an imaginary field partner and say they are offering loans at 50% APR to borrowers in a rural village in Mexico. The average loan size is $400.

The administrative cost of setting up the loan can be significant, all the time for initial loan applications, putting people into the MIS, setting up repayment schedules, etc. Let's say that cost $75. Then, there is the cost to collect the loan repayments. Remember, we are talking about a remote village, somewhere that takes a 3 hour motorcycle ride to get to from a major city. This 3 hour ride to collect on loans happens every 2 weeks for 6-12 months. Thus, you have the loan maintenance cost, let's say $100. Finally, you get down to the actual rate the microfinance institution is charging just to stay afloat (if you look at the return our partners are getting, for the vast majority it's just enough to stay afloat), and say that interest is around $25. So $75 + $100 + $25 = $200 plus the original loan $200 + $400 = $600 and thus you have the 50% APR.

Compare this to the only alternative available in that area, a back alley loan from a loan shark for 250% APR, compounded daily. The loan shark has low overhead so it's mostly just cash in their pockets, unlike most of the MFI's who use their proceeds to expand loan offerings or offer other care (like health information) along with the loans they are giving out.

Anyways, I could still see how some people would see that as excessive, despite how the APR jives with the cost, in that case one could just choose not to lend through Kiva or to only loan to borrowers who go through an MFI with a low interest rate. Personally, from the lenders I've talked to and borrowers I've heard from, they are happy with what is being offered to them. It's worth noting that none of this money goes to Kiva. We run off of donations, corporate grants, etc. There are of course, as mentioned, many other organizations now which lend as well and one could check them out. Paypal's offering (microplace I think it's called?) actually returns interest to lenders if you are in to that.

Alternatively, Kiva just launched a direct peer-to-peer lending system called Kiva Zip, https://zip.kiva.org/, however you'll have to wait a bit because it's still in beta, it's been really neat to participate in it so far.

I'd be happy to answer any questions about Kiva if anyone has any, or you can check a page I actually made for the website: http://www.kiva.org/about/how

Personally, I think we are doing amazing things, but my opinion is naturally skewed cause I work here and think it's the best job ever

So, a long time in coming here is what happened with our (some engineers at Kiva) project to attempt to integrate Bitcoin.

Basically, as we talked to many people in the organization, it became clear we wouldn't have widespread support to start, so we thought we'd just go ahead and build something and ask forgiveness later. However, we did want to at least do some good due diligence on how to proceed. Thus, we started by talking to many people about their experiences with Bitcoin. We talked to some fellow non-profits, and the lawyer from one particular organization gave us some strong reasons to not move forward. We then talked some with our lawyer, who cautioned against doing anything that could distract from Kiva's core mission by bringing about controversy.

So, we shelved the project for now, out of respect for our colleagues wishes. We'd still like to proceed, but we would have to find a way to do so while knowing that everything we do will meet our mission and not place us in a position of legal questionability.

So, from my perspective, what that means is that I'm going to wait (the other engineer who was working on Bitcoin with me here just left Kiva) until there is some solid example of another non-profit to point to, as well as some more legal frameworks/precedent set with Bitcoin usage, so that I can then point our lawyer to it and ask him if we can proceed.

I appreciate everyone's advice here on the forum. I believe in Bitcoin as a viable method for transactions along with most people here, but like you guys I'm stuck waiting for someone to take the lead. I was hoping we could take some lead, but it's simply *perceived* as being too risky. I have confidence though that with all the great people working on Bitcoin that there will eventually be a path forward.

Again, sorry for the delay in response, and thanks everyone for your advice and support.

Cheers,

mrchilly

Good points made regarding implementation, and they are appreciated. This little "mini-step" got funded by one of our engineers (I personally got roped into upgrading Redmine, boo), so we'll report back here with what happens. We are timeboxed to two weeks, so you'll either know if something happened or not by the end of the two weeks. Again, this is just a small proof-of-concept step to see if we can subtly get people here to accept a role for Bitcoin internally, then push for something more external, and if that is successful, we can move on to more ambitious plans! If not, then at the very least, you'll get a case study of what the barriers were to success.

Several of you have contacted me, and I will get back to you, the suggestions for help are very much appreciated. I look forward to following your suggestions and/or soliciting your help when the time comes.

(<begin cover ass>)And again, the reason I chose to start with this, is it seems a very simple way to get Bitcoin's foot in the door, after which it can move forward further if successful with this small step, and of course just cause we're working on it doesn't mean that it will necessarily happen, and of course, I am only speaking for myself and some engineers at Kiva, but not for Kiva itself (</end cover ass>).

Howdy again all.

I've been reminded again to tell everyone that obviously any such integration would be on a very long timeline, as I'm sure all you guys are aware, and to keep any expectations realistic. Currently, Kiva does not support or accept Bitcoins, and there is no clear indication in the future that it will.

Now, that out of the way, today on our innovation iteration idea board I have put up a "Bitcoin Proof-of-Concept". At Kiva we get two week innovation iterations to work on whatever want that we think will benefit the organization. These happen ever 14 weeks. Posting the idea up gives a chance for people to "buy-in" to it by contributing work points towards the idea. If the idea gets enough points, it gets funded, meaning people will go work on the idea, get it done, and then come back to some approvers to see what they think about implementing it.

This particular idea I have thrown up would just be for internal use among Kiva, and if it went well, then I could request to see whether or not it would be allowed to shown public.

The important thing here is to work in very small steps (agile development if you will), to see if we can push Bitcoin from the engineers up.

I love the discussion and want to contribute more to it soon, but have to get back to work!

Finally, again, I am just an engineer at Kiva, there are several other like me, that like you, wish to get more involved in Bitcoin, we have some free will to do exactly that, however everything requires approval from lots of people, as well as lots of time. However, we are much more likely to work on something when there are people out there who want. It's obvious from the talk here, that something like this is wanted.

-mrchilly

Howdy! Thanks for the interest. I am going to cheer on some Kivans at trampoline dodgeball shortly, so have to make this short.

I'm happy to see the interest and happy to know of fellow Kiva lenders!

Been starting to have more discussions with co-workers already again about Bitcoin. It's an exciting topic, especially since we have an innovation iteration coming up. This is a time in which Kiva engineers can work on any project they want, as long as they think it would benefit Kiva. Thus, I'm going to be putting up the suggestion to make a proof of concept, though I'll really have to hash out what the smallest possible proof of concept would be (I'm thinking a simple payment gateway for accepting Bitcoin donations). It's important to keep the goals small to begin with, as trying to do something too large right away (like trying to convince Kiva to supplement current payment methods for Bitcoin) would fail outright.

That said, I'm pretty confident that given enough time, we'll see some proof of concepts getting built, which would allow us to approach our Legal and Audit teams to discuss what the hurdles would be there.

Also, while the enthusiasm is great, I'll continue to repeat my realism, which is that any such project would have a long timeline.

The more buzz there is though, and the possibility of a bounty, definitely lead to engineers here being more interested!

Look forward to continuing the conversation tomorrow.

P.S. May I have permission to begin posting in the other forums?

Hi all,

I work at Kiva (http://www.kiva.org) as a software engineer.
I'm interested in talking more about Bitcoin and Kiva, and considering the rules here, although I am no stranger to Bitcoin, it seems it may be best to give a few posts about what sort of things are going on that can bring the two together.

There are 3 engineers here in addition to me who own Bitcoins and have an interest in spreading their use further. One of the ways we realized we could do that is by first educating the organization about what Bitcoins are. Kiva has a neat concept of self-run "Brown-bags" where anyone can discuss a topic (sort of like a Google tech talk), so we put together a presentation to educate fellow Kivans on Bitcoins, both their benefits and drawbacks.

Later on I realized some of our lenders were interested in Bitcoins as well, though as you can see, they also know that there are both benefits and drawbacks: http://www.kivafriends.org/index.php?topic=5789.0

In my next post, sometime later today, I'll discuss sort of a roadmap of how Kiva could start getting a Bitcoin project going.

Don't be led astray though, I know that any project to implement Bitcoin would take at the very least 6 months, and more likely a year, mostly due to the non-technical hurdles (like legal and auditing). So in a third post, I'll talk about why those things are an issue.

Cheers,

mrchilly

Howdy,

I work at Kiva (http://www.kiva.org), and have been interested in Bitcoin for some time, though I've only actually purchased 1 bitcoin, half of which I sent to feed the protest (the NYC wall street protest).

I've already had some interesting experiences with Bitcoin, one of which was calling out the guy who "traveled across the country on Bitcoin" on some of his bullshit. (Can discuss that more if anyone is interested, but basically the guy promised people bitcoins in exchange for items and he went and didn't pay up until months after the fact and only after being harassed about it).

I'll probably do a separate thread to talk about Kiva & Bitcoin and what a long-term plan would like to get that in action.

Cheers.