The founders of Kiva, Matthew and Jessica Flannery,
are both Stanford grads. They came up with the idea for
Kiva (which means “unity” in Swahili) after visiting
East Africa. They noticed that many people had no access
to affordable credit. They were familiar with the work of
Nobel Peace Prize winner Muhammad Yunus, a pioneer
in the field of microcredit. Was there a way to make that
work here as well?
The Flannery’s used the power of the internet and the
combined skills and creativity of friends and colleagues
around the world, to introduce people from resource
rich countries to people in resource poor countries and
allow a dollar to go a long way. Their dream was to create
partnerships as opposed to charity and to
allow the lenders and the borrowers to get to
know each other.
Now, anyone can put a few dollars where it
does a world of good. Kiva provides photos and
bios of the entrepreneurs and lenders. You can
choose to loan funds anonymously. After exploring the website
I realized that it was more meaningful to see
the faces of the lenders as well the borrowers.
If I liked knowing something about who I was
loaning money too, perhaps they would like to
know something about me.
Although Kiva is headquartered in San Francisco,
it works with local vetted organizations that manage
candidate selection, loan distribution and repayment.
At this time the repayment rate for loans is >95%. I was
blown away.
A few minutes of your time and a few dollars can
change someone’s life. Amazing. This is an idea whose
time has come
How Kiva Works
Choose an Entrepreneur, Lend, Get Repaid
The diagram below shows briefly how money gets from
you to a developing-world entrepreneur, and back.
1) Lenders like you browse profiles of entrepreneurs in
need, and choose someone to lend to. When they lend, through
PayPal or on their credit cards, Kiva collects the funds and
then passes them along to one of our microfinance partners
worldwide.
2) Kiva’s microfinance partners distribute the loan funds
to the selected entrepreneur. Often, our partners also provide
training and other assistance to maximize the entrepreneur’s
chances of success.
3) Over time, the entrepreneur repays their loan. Repayment
and other updates are posted on Kiva and emailed to
lenders who wish to receive them.
4) When lenders get their money back, they can re-lend
to someone else in need, donate their funds to Kiva (to cover
operational expenses), or withdraw their funds.
You always are notified when they make their
monthly payment, and occassionally with something
more personal.
Is there a chance you will never see your money
again? Of course. There could be many reasons, from
war to monsoons, as to why people may not be able to
keep their promises, just like in Canada, things happen.
However, it would be rare, versus the norm here. But
with the possibility of my $25 doing so much good, I’m
willing to trust!
In
September 2007, I initially made 3 loans of $25 to three different
entrepreneurs. On 27th of September 2008, one loan is completely
repaid, two are repaid at 88%, I personally have received repayment for
all three loans that I made and have had the opportunity to re-loan to
three other entrepreneurs with the re-payment money. Even with a
little we can do a lot.
October 2009 Update....re-loning is very easy with Kiva. As soon as $25 has been repaid into my account, I have the opportunity to lend to someone else and give them some assistance. Of the twelve loans that I have made since joining Kiva, six loans have been totally repaid and the other six are well under way.
Click here to see first hand how these three original loans have been working...all it takes is a click of a mouse.
Will you take the challenge?
