Kiva- In Depth

What Kiva Does-
Kiva prides itself on being "the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world". What this means is the lender has the power to choose to whom they make their loan. Lenders can be assured that they are not just throwing their money away because Kiva partners with "expert microfinance institutions" who hand pick qualified, dedicated entrepreneurs to ensure that only deserving people receive the loans. Finally Kiva prides itself on it's transparency, "We are constantly working to make the system more transparent to show how money flows throughout the entire cycle, and what effect it has on the people and institutions lending it, borrowing it, and managing it along the way."

How Kiva Works-
There are five simple steps to making a loan through Kiva.
1. Lenders choose an entrepreneur they want to support.
2. Lenders make their donation using PayPal or Credit cards. Kiva makes sure that the money is passed on to the correct institutions.
3. Kiva's partners distribute the money to the correct entrepreneur, as well as provide managerial training.
4. As the entrepreneurs build up savings they pay back the lender. Updates on the business ventures of the entrepreneur are e-mailed to the lender, and posted on the Kiva website.
5. Lenders can re-lend their money to another deserving entrepreneur, donate their money to Kiva to help cover operational expenses, or they can withdraw their funds.

For More Information-
For blogs, journals, success stories, and an opportunity to lend money go to the Kiva website at; www.Kiva.org

Grameen Foundation and Namaste

Here are some more organizations that provide Microloan opportunities.

Grameen Foundation- Empowering People, Changing Lives Innovating the Worlds Poor.
Site: www.grameenfoundation.org
Here is a video that is an excellent source of information on the Grameen Family Bank.


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Namaste Direct- Ending Poverty One Loan at a Time.
Site: www.namaste-direct.org
This video focuses on the changes being created in a Mayan village, as well as some background information on the organization.

Kiva and FINCA

If you are interested in doing some research on your own here are some great organizations to look into; FINCA (Foundation for International Community Assistance) and Kiva World Bank. Here is a brief overview of each foundation. I will be posting a more in depth look at each later on.

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Kiva- Loans that Change Lives.

Link: http://www.kiva.org/

Kiva was founded in 2005. They allow lenders to choose to whom they donate, they are the first microloan bank to support that feature. Their website provides information about their past, and where they hope to go in the future. They also have featured lenders as well as featured entrepreneurs.

One of the best features on their site is the "Impact this Week". This is a scrolling text that states; the number of new lenders who joined the site this week. The number of entrepreneurs funded this week. The number of loans completely repaid this week. The number of hours it takes (on average) for the full amount of a loan to be acquired. And the amount of money lent each week.

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FINCA- Small Loans-Big Changes

Link- http://www.villagebanking.org/

Founded in 1985 FINCA was the first organization to support the idea that credit not charity was the best way to help the poor. FINCA is aimed at helping empower working women and their families.

There are no hidden fees taken away from the money lent, with all mailings they include a pie chart to show exactly where the money goes. 3% goes towards fundraising, 6% goes to General and Administrative, and 91% goes to Program Services, or the poor that the money is meant to go to. This breaks down to $1,488,203 going to fundraising, $3,374,861 going to General and Administrative, and $47,148,936 going to Program Services. This totals $52,012,000 annually.

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These are both worthy causes. I highly recommend exploring the sites on your own. In future posts I will go into more depth about how each of these organizations work.

Video Bar

I recently edited my blog to include a video bar. The videos featured should be related to microloans, poverty, and small businesses. However, I have not viewed them all, and do not know how relevant or informative they are. They are not there to necessarily inform, so much as to present an opportunity to do some further exploring on the issues that face our world today, and how microloans can, or cannot depending on the view of the video, change the world. The videos will change every time the page is refreshed. I will follow the videos, and when I find ones I think are particularly good, I will embed them in my post. Such as this video-

How to Use a Microloan

I've posted alot of information about whether microloans work or not, and I've posted some information about how to donate to microloans (don't worry, there's more coming). But here is a site that tells how to best use a microloan. Which is something alot of people don't understand. Even if you're not interested in getting/using a microloan it is good to know how they are used. Whether donating to a foundation, or just learning more about the process this is valuable information. The link below is to Entrepeneur.com- http://www.entrepreneur.com/money/howtoguide/article52724.html

NYT; Problems with Microfinancing

Here is a link to the New York Times. The article is titled, "After Success, Problems for Microfinancing in Mexico" http://www.nytimes.com/2008/04/05/business/worldbusiness/05micro.html?_r=1&hp&oref=slogin

Do Microloans Work?

Here are some videos and articles that debate whether Microloans work.

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This YouTube video balances the pros and cons of microloans. http://www.youtube.com/watch?v=J4wxo5IHpT0

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March 17th, 2008 James Surowiecki wrote on The Finacial Page of The New Yorker, "There’s no doubt that microfinance does a tremendous amount of good, yet there are also real limits to what it can accomplish. Microloans make poor borrowers better off. But, on their own, they often don’t do much to make poor countries richer...This isn’t because microloans don’t work; it’s because of how they work. The idealized view of microfinance is that budding entrepreneurs use the loans to start and grow businesses—expanding operations, boosting inventory, and so on. The reality is more complicated... most microbusinesses aren’t looking to take on more workers. The vast majority have only one paid employee: the owner. As the economist Jonathan Morduch has put it, microfinance 'rarely generates new jobs for others.'...What poor countries need most, then, is not more microbusinesses. They need more small-to-medium-sized enterprises, the kind that are bigger than a fruit stand but smaller than a Fortune 1000 corporation. In high-income countries, these companies create more than sixty per cent of all jobs, but in the developing world they’re relatively rare, thanks to a lack of institutions able to provide them with the capital they need." For the full article click the link below: (http://www.newyorker.com/talk/financial/2008/03/17/080317ta_talk_surowiecki)

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A really great resource to find out more about microfinance is the Kiva website. Kiva is one of the best well known microloan sites. San Francisco based Kiva was developed in 2005 and has since then lent more than $11 million in microloans, as reported by Josh Catone on ReadWriteWeb "Kiva.org has now funded almost 17,000 loans by over 110,000 lenders. The average size of each loan is $649.63 and the repayment rate is a very impressive 99.59%." The link below connects to Josh Catone's article "Kiva.Org Crosses $11 Million in Microloans to Developing Nations": (http://www.readwriteweb.com/archives/kiva_11_million_in_loans_to_developing_nations.php) The link below connects to the FAQ page: http://www.kiva.org/about/microfinance/

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The next few posts will focus more on different organizations, such as Kiva and other less well known organizations including Namaste Direct and Finca.