Online giving - keeping it honest

A recent New York Times article highlights an important challenge that online giving and lending sites face. How do you make your model appealing but maintain transparency and efficiency?

Kiva.org, the most popular online lending site, allows users to lend small amounts of money to microentrepreneurs in developing countries - at least that is how Kiva presented it. In reality, the funds that users donate go into a pool of money for microfinance institutions. Typically, these institutions lend money to the individual entrepreneurs before the loans are made on Kiva. A person-to-person model is appealing, but not efficient. If individual borrowers had to wait to get their money from a group of lenders, it's likely that many of them would end up waiting for weeks. So, it's understandable (and acceptable) that Kiva operates the way it does.

Kiva modified how they explain their model on their website due to the latest scrutiny. Whether this affects their popularity remains to be seen.