Life is busy as ever. The primary task -- building an organization to last. Some news:

-- We've added some amazing people to the team. In the last month we've added an illustrious engineer Jon Kart, a VP of microfinance Isabelle Barres from the MixMarket, a microfinance expert John Berry and a Finance Director Jen Hamilton. Hiring in a period of growth is a significant time commitment, but the commitment pays off many-fold when you hire the right people. These new friends are going to start paying huge dividends soon for Kiva.

-- Our focus these days is managing the mounting risk on our site as we start sending larger and large sums to the microfinance field partners in our network. Our solution is to be transparent to lenders about the risks of lending on our platform. To that end, we've created a risk rating system to be displayed to our user base which will go live later this week. This is one of the most significant accomplishments in our short history and is the culmination of nearly 6 months of work.

-- We are making a significant move to do more work in the field. Finally, we are at a point where we can afford this it makes incredible sense. We've sent over 40 Kiva fellows to the field, are conducting audits all around the world, and are signing up new MFIs by actually visiting them and training them. In our first year we had very few partners in South and Central America. We are just rectifying that by signing up high quality partners there, for instance Pro Mujer Bolivia and FINCA Peru.

-- I've been trailed by a Japanese film crew for the last week. NHK Japan is doing a series on social entrepreneurship and I've learned a lot about the evolving attitudes towards social issues in Japan thanks to a week hanging out with the crew. It's been a learning experience and so much fun to spend time with the crew. Hopefully, we will be able to handle the outpouring of Japanese interest later this year when the show goes live!

-- Kiva continues to face chronic shortages in businesses to fund as we try to accomodate the growing lender interest while managing risk on our platform. We've limited user transactions to $25 per user for the rest of the month to deal with the shortage. We live in crazy times!

-- I'm off to Aspen Colorado tomorrow to spend the rest of the week at the Brookings Institute conference on Poverty. I'm excited about the event but it will be hard to be away from home.

-- Jess and I just completed a move back to the Mission District/Noe Valley area where Kiva began. Her graduation from the Stanford GSB prompted the move and it is incredible to realize the dream of walking to work.

-- Jess just took off for a trip to West Africa to visit MFI partners there and she is working again for Kiva dealing with some of our relationships with MFIs in the field. It is amazing to be working together but hard to be apart.

-- We moved to a new office to accomodate the growth. Our team is in the process of moving from 10 to 20 people and needed a better space to handle the new activity. The new place is intimidatingly professional.

-- Kiva will be on the Today show this week or next. This is another humbling episode in a series of media events about Kiva and social entrepreneurship.

More to come.

The Internet is a big place. Pretty much everyday we get letters like this from all over the globe:

TO KIVA.ORG,

MY WIFE AND I STARTING ALREADY A PALM OIL FARM IN EAST-MALAYSIA (BORNEO), WE PLANT ALREADY 440 PALM TREES, BUT TO RUN A PROFITABLE BUSINESS HER WE NEED TO PLANT MORE TREES, WE HAVE OUR OWN LAND HERE, BUT IT IS A VERY RURAL AREA, SO WE HAVE TO CUT SOME SMALL FRUITTREES AND MAKE A ROAD ALSO TO OUR LAND, SO MY QUESTION NOW IS CAN WE ASK KIVA.ORG TO SUPPORT TO GET/MAKE A LOAN FOR US?

THANKS FOR YOUR TIME,

DIRK

MALAYSIA

Usually these emails come in ALL CAPS (for emphasis?). Some of them probably legitimate requests. Most of them are probably scams of the 419 variety. A palm oil farm? Sounds fascinating. I wish I could get involved. But I can't right now.

International, disintermediated Internet lending of the Prosper.com variety right now remains a pipe dream for the Kiva team. At first glance, it's definitely what we are all about. The mission of Kiva is 'to connect people through lending to alleviate poverty." The Internet is an incredible tool for removing layers of intermediation and connecting people who might not ever meet in the physical world. Lending is a binding tool to create lasting financial and emotional connections. We are seeing that every day on the site.

Microfinance is largely about banking the unbankable and providing low cost financial services to those left out of the formal financial system. The first seven borrowers on the site were unbankable. Jess and I couldn't send them funds via PayPal to an isolated village outside of Tororo Uganda. Still, we found a way to bank them. How? We went through a pastor who served as the critical connector between the bank and the first Internet lenders. "That's nice" any expert we talked to said. "But how is that going to scale?" Certainly we couldn't hire pastors in thousands of villages across Africa and beyond....

Prosper.com relies upon a few systems in the US that are not largely available in most of the developing world. First, they rely on electronic transfer to deliver funds. Lenders and Borrowers on Prosper transact through bank transfers connected to the web. This allows a lender to send money directly to a borrower with little intermediation. Second, they rely on a well developed credit rating system. FICO scores help lenders on Prosper differentiate between credit worthy borrowers and other less reputable investment opportunities. Last, they make use of a robust network of collections agencies which come calling on borrowers who fail to repay. None of these three exist in most of the places where we work.

So we looked to microfinance institutions (MFIs) as a more scaleable solution. MFIs serve all three needs nicely. First, they provide a hub for funds distribution. We can send MFIs cash through wire transfers who then distribute cash to isolated persons. Second, MFIs create a de-facto credit rating system through local reputational collateral. MFIs are deeply ingrained in communities and make use of an often informal sense of credit worthiness. Lastly, MFIs serve as collection agencies. There is nothing more motivating for collection than one's local reputation, relationship to a group and the prospect of future access to larger loans. MFIs are Kiva's answer to the more developed systems available in the USA.

So, will Kiva ever be able to provide truly disintermediated lending opportunities? Might we ever be able to get our funds right to someone like the Palm Oil Farm in Malaysia? The answer is , hmm, maybe.

Jess graduated two weeks ago. I had a lot of time to sit around with my family and read. I picked up Forbes Magazine. A cover story on African business reads:

With few banks around the continent, mobile networks pick up the slack. A South African company called Wizzit allows rural farms and other employers to pay their workers in credits that are good on a credit card or via cell phone. People can send one another money over the network or withdraw sums from a cash machine. With 160,000 users, stores are already using Wizzit to accept cell phone payments.

I heard about Wizzit this January and my mind raced. A few days later I heard of similar services across East Africa. In Kenya, Safaricom is following suit and so is K-Net in Uganda. Cell phones are life in East Africa. Sometimes it can feel like nothing works in East Africa -- except mobile. Even the poorest, most remote towns in Uganda are colored red and yellow with the Celltel brand. It seems like everything the govt touches goes to hell. Celltel, a banner to privatization, is thriving.

My imagination fades into the future. Can Kiva one day enable a loan directly to a Ugandan phone? It might not be so far off. Hold on Dirk.