What is Kiva?
Yesterday I talked about how rich we all are. I also pointed out how many in this world are mired in poverty. Today I would like to talk about one way, we can help.
Since December I have been making regular microloans thru an organization called Kiva. Kiva serves as a conduit between individual lenders and entrepreneurs in the developing world. For example, a farmer in Kenya needs a loan of $500 to buy a tractor and fertilizer. Kiva puts his story up and individuals can choose to lend. The loan is divided into $25 slices. Once $500 is gathered the loan is funded. Individuals lend at 0%. The money goes to a local micro finance institutes which makes and services the loan. When the loan is repaid, you can either relend the money or withdraw it.
There has been considerable criticism of Kiva. One reason is the micro finance institutions or field partners tend to lend at high interest rates. Personally, this doesn’t concern me. I would prefer to make 0% loans, but that would make it impossible for the microlenders to survive. The important thing to me is that Kiva makes it possible for people to get loans that will improve their lives. Without Kiva many of these would be entrepreneurs would have no access to credit. As long as borrowers are better off when the loan is repaid, I believe Kiva is providing a benefit to the borrowers. The loan repayment rate is 99% so I don’t believe the borrowers are not benefitting. With the loans, they are able to start or expand small businesses or buy farming materials. Things they might not be able to do without Kiva.
If you would like to learn more, you can visit Kiva’s web site