It’s rare that a lecture can change a person’s life.
However, social entrepreneur Jessica Jackley’s career path took an abrupt turn in the fall of 2003 when she attended a talk at Stanford University by Bangladeshi economist Muhammad Yunus. He’s the Nobel Peace Prize–winning founder of the Grameen Bank, which has provided microfinancing to more than eight million borrowers, mostly desperately poor women with no collateral.
Since childhood, Jackley had had a keen interest in international charity, often sending money overseas to help those in need. But until she heard Yunus speak, she had no idea that tiny loans could help people escape extreme deprivation.
“He opened my eyes to this whole new way of interacting with and serving people living in poverty,” Jackley told the Georgia Straight by phone from her home in Los Angeles. “He showed me that I could see people living in poverty as entrepreneurs.”
Yunus’s lecture was the catalyst for Jackley and her former husband, Matt Flannery, to found Kiva in 2005 as the world’s first online microlending platform. According to the organization’s website, more than 1.3 million people have provided nearly $726.5 million through Kiva in small loans to entrepreneurs around the world. Individuals can lend as little as $25.
In her new book, Clay Water Brick: Finding Inspiration From Entrepreneurs Who Do the Most With the Least (Spiegel & Grau), Jackley describes how Yunus helped turn her perceptions about poverty upside down with his inspirational stories of successful entrepreneurship in Bangladesh.
Rather than seeing people in the developing world as needing endless handouts to survive, she realized that many are determined and resourceful if given the means to finance small businesses.
“For the first time in a long time, I began to think about the big, overwhelming task of alleviating poverty as something that was actually possible, one person at a time, through a series of small, discrete steps—steps that could be catalyzed with a small loan and support along an entrepreneurial path,” she writes.
Jackley told the Straight that Kiva started small, with just seven borrowers, and Kiva lenders didn’t collect interest. Borrowers paid a small fee to institutions that distributed funds in different countries.
On an early trip to East Africa, entrepreneurs told her that they were more interested in receiving loans than donations because they wanted to feel independent and strong. Despite this, some lenders wanted to give online rather than provide small-scale financing.
“It was very difficult to communicate to people clearly and concisely that it was really actually a loan,” she said. “There was this idea that loans were less good and less generous than a donation.”
One of the keys to Kiva’s success was that lenders were connected to the businessperson who borrowed the money. Lenders could go online, read profiles of entrepreneurs in poor countries, and receive updates along with repayments.
Jackley reveals in her book that a year and a half after Kiva’s launch, she was offered $10 million in loans by a well-known but unnamed tech company. She refused it because there would have been no “connective experience” between borrowers and this lender.
“People want to feel invested in other individuals’ entrepreneurial journeys and in other businesses and startups that they love,” Jackley said.
Clay Water Brick includes vignettes about several entrepreneurs in poor countries who’ve succeeded through ingenuity, hard work, and a small amount of financing. The title refers to the first one profiled, a Ugandan brick-maker named Patrick.
Jackley admitted there were bumps along the way. In 2007, a $125,000 fraud was perpetrated on Kiva by a close friend of Jackley’s in East Africa who had helped her locate the first borrowers. Kiva let lenders know about the scandal.
“I feel like we all learned a lot about having systems in place to promote accountability,” she said.
The biggest crisis, however, came when her relationship with Flannery deteriorated. In her book, she states that Kiva is “not the sole reason” they ended up separating, but the end of their marriage led her to leave the organization. She started another venture, ProFounder, but wound it up in 2012.
Jackley is now married to best-selling author Reza Aslan, and they have three sons. Jackley and Aslam will each appear at this month’s Indian Summer Festival in Metro Vancouver.
"I hope that people who read the book or that hear my speak leave feeling inspired and a little less stuck about whatever barriers stand in their way," she said.
Jessica Jackley will speak at the Goldcorp Centre for the Arts at SFU Woodward’s at 6:30 p.m. on July 16 as part of the Indian Summer Festival.