Microfinance USA 2010: Storytelling and New Technologies as Key Success Factors for Microfinance

By May 25, 2010

Last week, Microfinance USA 2010 conference took place in San Francisco with a clear goal: how to develop and communicate about microfinance in the USA, even though 85% of the American population has never heard of it. The open

ing session with Maria Shriver and Kiva CEO Premal Shah highlighted the top priorities of this new industry. The first lady of California gave a clear view of what represented the microfinance area to California as an alternative financing model for entrepreneurs: "[Small and medium enterprises] are the backbone of the California economy and consequently, microfinance initiatives must be supported," Shriver said.

As a communications expert, Shriver noticed that microfinance lacks the good storytelling needed to get people to understand its unique position. At the same time, Premal Shah explained that the Internet and new technologies give a unique opportunity to connect people and money together to make a better world. This is precisely the goal of Kiva as a nonprofit, but there is room for everyone to better finance people's projects and dreams.

Scalability to reach the masses and economic development were hot topics during the two-day conference. The problem of distribution channels for MFIs (MicroFinance Institutions) is exactly the same as retail: franchising is key and technologies can facilitate the flexible control of such networks. Furthermore, microfinance must be packaged with a global understanding of people's needs, especially in emerging countries. For example, Living Goods developed this idea for a health initiative.

Obviously, online P2P lending was cited as being one of the most effective way to answer people's needs. Paul Blyth from Microplace described it as “character-based lending,” as borrowers have to market their personal story on the web to strangers in order to get their funding. Such analysis was appreciated by the attendees as sharing similarities with their MFIs.

The conference gathered a lot of passionate people who want to find the future of their new industry. The conclusion could be that microfinance has to evolve and understand the use of the internet and mobile in order to achieve its social goal.

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