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SuiteWorld 2019: Using technology to close the financial gender gap

The CFO from non-profit organisation Kiva explains how the organisation is using distributed ledger technology to close the financial inclusion gender gap

Globally, woman are less likely to have access to traditional bank loans than men, according to Pamela Yanchik Connealy, chief financial officer (CFO) and chief operating officer (COO) of non-profit organisation Kiva.

Speaking at SuiteWorld 2019, NetSuite’s annual customer event, Yanchik Connealy said that whether or not you have access to finance is based on several factors including gender and “your birth lottery”, such as where in the world you were born and what kind of family you were born into.

While Yanchik Connealy joked the words used in Kiva’s vision statement were “heavily debated” to avoid political incorrectness, she added: “Our vision is to create a financially inclusive world where all the people hold the power to improve their lives. Our mission is really expanding financial access to help underserved communities thrive.”

The Kiva.org funding platform is already making strides in funding women in poorer parts of the world to pursue business ideas, and Yanchik Connealy explained how the organisation is working on creating a more inclusive world for the 1.7bn “unbanked” across the globe.

Loans for the unbanked

Yanchik Connealy’s background is in chemistry, and she quipped that her favourite thing about working in the chemicals industry was that she “didn’t have to wait to go to the restroom”.

While the science, technology, engineering and maths (Stem) industries are slowly improving the gender imbalance, financial inclusion in some of the poorest parts of the world is still severely lacking.

After time in several technology organisations, and a brief role in talent acquisition, Yanchik Connealy searched for a role where the people around her would be passionate about the “social impact” organisations have on the world – and she landed on Kiva.

A crowdfunding platform of sorts, Kiva.org allows lenders to choose a project and offer a loan of a minimum of $25, which will eventually be paid back.

The platform currently has two million lenders across 192 countries, three million borrowers in 85 countries, an average loan size of $400, and current total lending of $1.2bn.

Its goal is not only to use financial inclusion to support individuals in their goals, but to better communities – the community aspect was an emphasis Yanchik Connealy said she was “adamant” and “passionate” about.

“If men thrive, men thrive. If women thrive, communities thrive, education is improved, health outcomes improve,” she said. “It makes a huge difference.”

But women are less likely to have access to funding from traditional banks – even in privileged western areas, female-founded businesses are less likely to find backing.

“You can argue the statistics, but for every dollar a man makes, a woman makes about 63 cents,” said Yanchik Connealy.

She pointed out that women spend around three times the number of hours working in unpaid roles such as volunteering for local businesses, churches or being full-time mothers.

“We’re really focused on thinking about women empowerment in the Kiva paradigm.” Yanchik Connealy said.

But while many say women from poor backgrounds pose a bad credit risk, more than 80% of Kiva’s borrowers are women, and the platform has a 97% repayment rate.

Much like symphonies offering blind auditions to remove unconscious bias from the selection process, Yanchik Connealy said Kiva is trying to “reduce the bias that will come when a woman walks into a bank”.

“We’re working really hard to understand what the barriers to being a financial viable business or individual are,” she said.

While 2.4 million female entrepreneurs have been supported by the platform over its lifetime, Yanchik Connealy said this is not enough.

Developing the Kiva Protocol – ID and credit for the financially excluded

Eliminating bias from the selection process and providing crowdfunding for the “working poor” is only the “tip of the iceberg” when it comes to global financial inclusion, according to Yanchik Connealy.

Kiva conducted research to look more deeply into the reason many find it difficult to access funding. It found two core barriers to financial inclusion: a lack of identity and a lack of access to credit.

“What we realised is that there are a billion women who don’t have access to credit, and many of these women don’t have an identity,” said Yanchik Connealy. “They might be the fishmonger’s wife, they might be the woman who lives in the red hut.”

To tackle these problems, the company launched Kiva Protocol, which uses blockchain distributed ledger technology to give the unbanked an identity and a line of credit in the future.

As part of the Kiva Protocol, credit transactions through the Kiva platform, such as a loan or a repayment, are captured on a distributed ledger. This can then be used as proof of identity and verified credit history if the individual should ever hope for a loan from a national bank.

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Initially, the project will be tested in Sierra Leone before being rolled out to another 30 countries.

Yanchik Connealy said she hopes Kiva Protocol will be of particular help to refugees in the future, who will quite often have to give up their identity when they leave their country.

“When you leave, you’ve given up your identity and your life – you’ve got nothing” she said. “You could be a doctor, a teacher, you could be really anything, but when you leave you’re nothing. They need to figure out how to build a life.”

Yanchik Connealy said the focus is to provide long-term help to the 1.7 billion people globally who are financially excluded. “It can’t ever change, the community that you live in or your lifestyle, if you remain in a financially excluded world,” she added.

Powerful partnerships

The Kiva organisations operates with several partners to reach as many people as possible, one of which is NetSuite. From its partnership with NetSuite alone, more than 650 female entrepreneurs have been funded.

“The amount of impact that just this partnership with NetSuite has created has been phenomenal.” Yanchik Connealy said.

Jessica Page, regional sales director of not-for-profit account management at Oracle, who manages all of the not-for-profits on NetSuite in North America, said social impact has been important to NetSuite since its inception.

There are three ways the company tries to help not-for-profits and social good. These are Suite Donation, Suite Pro Bono and Suite Capacity, which are all focused on providing access to tech and help in using it.

More than $100m of software is donated by NetSuite every year, and more than 350 pro bono projects a year are focused on helping social impact customers.

Hundreds of NetSuite employees also volunteer to help social impact organisations. “It’s not enough to just donate software and wish people well,” added Page.

Examples of women benefiting from financial inclusion

As part of her presentation at SuiteWorld 2019, Yanchik Connealy shared some stories of women who have used the Kiva platform to take out loans and grow their businesses.

She began by talking about a woman in Oakland who “was famous in her church for making empanadas”.

When her church community said she should sell her empanadas, she signed up for a Kiva loan to expand her business, eventually hiring employees and buying a food truck.

“She now has 10 employees in Oakland, and the magical thing for me when I met her was watching her daughter watch her be successful,” Yanchik Connealy said.

“She was able to see her mum take loans and pay them back to build a business, to become a powerful member of her community, not just the church that loved her empanadas.”

While the woman has been successful through Kiva loans, Yanchik Connealy said she would have been rejected for a traditional bank loan as “all the numbers wouldn’t have matched up, even though she’s managed to do it successfully”.

Yanchik Connealy also shared the story about two women in Lebanon in Beirut, one of which was a refugee and the other her neighbour.

The refugee was struggling, and her neighbour helped her to take out a Kiva loan to grow her dress making business. The women run the business together, fixing up wedding dresses to rent to brides.

The refugee has doubled her income, and said while once she was always scared and constantly thinking about war, she is now glad her children can see her following her dreams, and hopes it will encourage them to one day follow theirs.

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