Kiva: Loans That Change Lives

A while ago, I was vis­it­ing Gean’s blog when I noticed an intrigu­ing ban­ner: “Lend $25, change a life. Get $25 back and lend it again. Change another life.” I clicked on the ban­ner and I was directed to Kiva.

I learned that Kiva’s mis­sion was to: “empower indi­vid­u­als to lend to an entre­pre­neur across the globe. By com­bin­ing micro­fi­nance with the inter­net, Kiva is cre­at­ing a global com­mu­nity of peo­ple con­nected through lend­ing.” I’m quite famil­iar with the con­cept of micro­cre­dit, devel­oped by Muham­mad Yunus and his Grameen Bank in the 1970s. The the­ory is sim­ple: peo­ple in devel­op­ing coun­tries have ideas and projects but it can be very hard for them to obtain a loan to finance them because of the lack of col­lat­eral. Yet, entre­pre­neur­ship is a way to fight poverty and is a great tool for socioe­co­nomic devel­op­ment. The solu­tion would be to loan small amounts of money to found local projects, with a low inter­est rate.

Kiva works with field part­ners who approve and dis­burse microloans to local entre­pre­neurs. They write down the entre­pre­neur story and pass it on to Kivia, which pub­lish it. Lenders browse the entre­pre­neurs’ pro­file and choose which project to help. Over the time, the entre­pre­neur repays the loan and you are cred­ited the repay­ment. You may choose to loan money again, or you can with­draw your capital.

I spent some time on the web­site. I started by brows­ing entre­pre­neurs from Cen­tral and South Amer­ica: hav­ing trav­eled there exten­sively, I felt a nat­ural bond. The peo­ple and their sto­ries seemed famil­iar: some wanted to open gen­eral stores (pulpería), some were into retail or in restau­rants. The vast major­ity of the loans required were truly microloans, rang­ing roughly from $200 to $5,000, with an aver­age of a $400.

I decided to jump on board.

I’m usu­ally a ter­ri­ble per­son when it comes to give char­i­ties money. First, I’m not always in a finan­cial posi­tion to do so. Sec­ond – and I know it sounds bad! – there are so many char­i­ties in Canada that I wouldn’t even know where to start. I can phone calls from tele­mar­keters almost every day ask­ing me to donate money for this, fund that etc. Most of the causes are great and worth fight­ing for but it can be quite over­whelm­ing. I’m some­times afraid that big charity’s admin­is­tra­tion costs are just too high and that money doesn’t get where it is sup­posed to. Not nec­es­sar­ily good rea­sons I guess, but this is why I haven’t really gave money.

Note that I’m not a total evil self­ish per­son. I did vol­un­teer my time in the past and I do pay my taxes gladly, know­ing they are also used to fund social programs.

What I loved with Kiva is that it made sense to me. I can see these projects work­ing, I like the fact that it’s not char­ity but a loan and I love the way it empow­ers peo­ple. Most of all, the min­i­mum con­tri­bu­tion amount is as low as $25. You can choose which project to sup­port, you can pay by Pay­pal or by credit card. What’s not to love?

On a very self­ish level, it’s also very grat­i­fy­ing to know that you will help some­one in the world to live a bet­ter life.

So I par­tic­i­pated in fund­ing a loan to Sonia, from Peru. This was a first time. I plan to loan another small amount later this month.

I strongly encour­age you to have a look at Kiva’s web­site and see if you can help a entre­pre­neur, some­where in the world. Change a life today… it’s eas­ier than it looks.

Related arti­cles:

1. Char­ity Begins at Home (And is Everywhere)
2. Wel­come Winter
3. Unpleas­ant Real­i­ties of Amer­i­can Life
4. In The Mood For Change
5. How to Avoid… Scammers