- slide 1 of 3
What is Kiva?
Kiva is an organization that provides loans for small businesses with the hopes of helping to alleviate poverty. So far, $135,000,000 has been loaned through Kiva to roughly 340,000 individuals in 196 countries. A high percentage of these loans (82%) have been made to female entrepreneurs.
Kiva is a non-profit organization that started in 2005, and was the first online micro-lender. A minimum loan of $25 is all that is permitted. The headquarters of Kiva is in San Francisco, CA, and the organization employes 34 full-time staff members. Kiva prides itself on offering a dignified means for those who need help to receive it, and to be transparent in their needs.
- slide 2 of 3
How Does Kiva Work?
Kiva's field partners are out in the world and they approve the loans when they are applied for. They write the story of the entrepreneurs, and they photograph them before uploading the profile to Kiva's website. After the profile has been uploaded, potential lenders choose someone to help through the lending of money using PayPal or using their credit card. This money is then provided to the field partners who put all the money from lenders together and disperse the funds to the entrepreneur.
The entrepreneur then repays the loan to the field partner over time. Once the funds have been paid back, they are given back to the individual lender who provided the money. If the lender chooses to, he or she can re-lend, donate the funds, or withdraw the funds to PayPal accounts.
- slide 3 of 3
Does Micro-Lending Work?
Studies have shown that micro-lending is a reliable way of helping individuals to climb out of poverty. Moreover, micro-lending can be a reliable form of socially responsible investing, since it helps someone who really needs help and it makes your money work for you. Granted, when it comes to Kiva, you should not see it as an investment strictly speaking - not one that will make you money, as you will not earn interest on your loan - but as an investment in someone else's potential at a successful future.
Some of those that have been helped by Kiva loans include a man who is hoping to repair his car so he can continue to work, a group of individuals who are hoping to expand their clothing business, and someone who needs assistance purchasing food products for her at-home store. While some of the amounts for the loans seem small, it's important to remember that in many countries, a little bit goes a long way to help someone overcome barriers to living a fruitful life.
There have been some criticisms of Kiva's ability to do good in the world. However, like with any charitable endeavor, if you are uncomfortable with the idea, you should fully research it before you participate. While there criticisms of Kiva, there are also those who support what Kiva and other microfinancing organizations are doing for the world.