There's a bank I'd like to talk to you about. To date, it has helped 353,682 entrepreneurs - 82% of them, women - fund their projects. It operates in 196 countries. The total value of all loans they've made is $138,537,245.00. If you do the math, you'll find that the average loan size is $391.70. This market, known as micro-lending, was long considered a high risk market. Surprisingly, this bank's repayment rate is an impressive 98.15%!
Now, I haven't told you the complete story. This bank is not really a bank. The entity I'm referring to is Kiva. You can visit them at www.kiva.com. There, you'll discover that they are actually a social network. The funds they lend come from people like you and me - 455,798 individuals, to be exact - that have chosen to become lenders through this person-to-person micro-lending web site. Kiva allows you to review the profiles of potential borrowers and provide a mechanism for you to lend money to them.
While Kiva will not turn the banking industry upside-down, it does exemplify a revolution that is taking place in front of our eyes. Many professionals and business owners remain oblivious to this revolution. Although they are aware of the increased mobility cellular communications and wireless technology has brought us, and regardless of the fact that they have embraced the internet, they haven't internalized the fundamental shift Kiva's business model conveys: the vanishing of boundaries.
For decades, managers used organizational charts to illustrate the working relationships within their organization. O-charts did a good job showing the formal chain of command but were silent to the informal networks that were so critical to obtaining results. With the advent of outsourcing and off-shoring, managers found themselves complementing the o-chart with process flow diagrams. These diagrams were a step in the right direction, documenting horizontal relationships from suppliers to customers.
In today's world, businesses operate in a much more open and complex ecosystem. Companies and customers co-create value in real-time through open-innovation networks. Empowered by technology, individuals share content and knowledge about products and services. Peer-to-peer markets such as kiva.com and zopa.com allow individuals to diminish the market power of established firms. Connectivity has, in effect, rewritten the rules of commerce making it more difficult for companies to capture value and orchestrate a profit.
Individuals and companies that can decipher how value is migrating across the wider ecosystem stand to gain through the development of new business models. This will require