Crowd-Sourced Microfinance and Cooperation in Group Lending

82 Pages Posted: 26 Mar 2010

See all articles by Scott E. Hartley

Scott E. Hartley

Stanford University; Berkman Center for Internet & Society, Harvard Law School

Date Written: March 25, 2010


Altruistic peer-to-peer lending, or crowd-sourced Internet microfinance, exposes a unique environment in which to observe cooperative behavior. Geographically diverse individuals coordinate to provide capital to others in need, often for minimal, or in the case of, zero financial return. While significant microfinance research has chronicled the windfalls of group borrowing in organizations such as Grameen Bank, little has been written on the cooperative dynamics of group lending, observing crowd-sourced microfinance and what online organizational structures facilitate cooperation.

At the end of 2008 announced the creation of “Lending Teams,” or cohesive open or closed membership groups established and categorized according to scope. These Lending Teams introduce forms of cooperative many-to-one and many-to-many group lending, based on tenuous concepts of identity. Groups vary according to category, size, scope, and activity, and this impacts participatory vitality of crowd-sourced lending.

The “ Crowd-Sourced Microfinance and Lending Team Cooperative Behavior” study focuses on evaluating the extent to which Solidarity as a design-lever impacts social behavior. Looking specifically at as a prominent community for peer-to-peer lending, this study seeks to evaluate the advent of “Lending Teams,” their subsequent impact on group lending behavior, and the extent to which group openness, size, and categorization substantively alters online cooperative behavior.

Based on data accessed through their public Application Programming Interface (API) in June 2009, this study qualitatively and quantitatively observes 120 Lending Teams. The study provides taxonomy of Lending Teams, and outlines key management choices that can foster greater in-group solidarity, and expand Lending Team participation on More broadly, the study prescribes how online solidarity can improve participation in crowd-sourced microfinance.

Keywords: Kiva, Microfinance, Peer-To-Peer, Lending, Economic Development, Crowd Source, Grameen

JEL Classification: A13, D64, D71, D82, G24, L31, O10, O16

Suggested Citation

Hartley, Scott E., Crowd-Sourced Microfinance and Cooperation in Group Lending (March 25, 2010). Available at SSRN: or

Scott E. Hartley (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

Berkman Center for Internet & Society, Harvard Law School

23 Everett Street
2nd Floor
Cambridge, MA 02138
United States


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