Kiva vs. MyC4: Business Model Innovation in Social Lending

The case describes the launch, growth and current challenges of two innovative ventures in the nascent social lending market. It shows how these organisations are using the concept of online micro lending to eradicate poverty. While operating in the same market space, the two companies have fundamentally different business models: Kiva is based on good-will while MYC4 is based on market incentives. Which model is more likely to succeed?

The case introduces the concept of business model design in new ventures that are establishing new markets. It explores the origins of business model innovations and how such models are designed. It also discusses their scalability and sustainability by comparing two very different business model designs for a similar value proposition. The secondary teaching goals are to illustrate two different modes of venture launch (emergent vs. analytical) and to provide an understanding of the microfinance industry and its innovations.