Incessant innovation and the “No Trustee” pilot

On the Kiva Zip team, we are continuously striving to innovate, iterate and improve on our model. In this spirit, we have decided to pilot a new Kiva Zip loan model without a trustee. For those of you unfamiliar with our existing model, a trustee is an individual or organization that publicly vouches for the character of each borrower. Since we launched Kiva Zip in 2011, we have partnered with 400 U.S. trustees who have endorsed over 700 loans, which have maintained an average repayment rate over 88%. We’re proud of how many trustees have stepped up to partner with us, and thankful for all of the time and energy they have dedicated to empowering entrepreneurs in their communities.

Despite the success of our trustee-based model, we have found that some borrowers struggle to quickly find a trustee. In some cases, the trustee requirement is discouraging potential borrowers from pursuing Kiva Zip loans. The speed at which entrepreneurs are able to access capital is often fundamentally important to them, so we are testing an effort to streamline the process in order to avoid forcing entrepreneurs to waste precious time trying (sometimes in vain) to find a trustee.

One question we have is whether the absence of a trustee will lead to a decline in Kiva Zip’s repayment rate. We are cautiously optimistic about the answer to this question, based on our innovative approach to social underwriting, which underwent a major breakthrough at the beginning of the year. In January, we rolled out the Private Fundraising Period, which requires U.S. borrowers to recruit 15 lenders from within their network of friends and family in order to have their loan posted on the public Kiva Zip website. This innovation makes borrowers accountable to their personal social networks, which has markedly improved our repayment rate. We feel that the Private Fundraising Period has laid the foundation for us to run this “no trustee” pilot program. That said, we still expect bumps along the repayment rate road, and we will be carefully analyzing the impact of this pilot on the risk profile of these loans as it progresses.

Over the next few weeks, we will be posting 30 loans to the website without a trustee. We will clearly flag these loans as being a part of the No Trustee pilot with the image below:

If you have any questions, feedback or ideas about this no-trustee pilot, we would love to hear them. Please send them to, or write them in the comments section below.


Posted by Jonny Price, Senior Director, Kiva Zip

Jun 26, 2014

Jonny first came to Kiva in 2009 as a volunteer on a 5-month externship from his management consulting firm Oliver Wyman. After 6 years at Oliver Wyman, first in London and then in San Francisco, he joined Kiva full-time in September 2011, to lead the Kiva Zip pilot project. Jonny is married to Ali, who he met at Kiva, and occasionally you may glimpse them cycling their tandem through the streets of San Francisco. He graduated with a BA in History from the University of Cambridge, where he represented his college at 14 sports (although 3 of these were table football, pool and chess).


Loading comments...