epidemics and injustice around the world but don't know where to start?
The internet, and some enterprising individuals, have created the interface to connect people through lending for the sake of alleviating poverty.
Kiva is the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs around the globe. 
Curt Larson read about the non-profit online micro-loan site in the Kiplinger magazine several years ago. He did some research to determine its legitimacy and found it endorsed by a whole host of reputable organizations, publications and individuals, including Oprah and former president Bill Clinton.
Kiva, which was the brainchild of Matt and Jessica Flannery of San Francisco, works like this.
People set up a lending account on the Kiva Web site. The site features profiles on small businesses and their owners, mostly in developing Third World countries. The profiles detail what the entrepreneurs will do with the money they are requesting, and there is usually a photo of the person or group making the request.
The loan requests are first vetted by non-governmental organizations also called micro financing institutions, MFIs, in the countries to determine their viability. If they pass muster, they are then forwarded onto Kiva.
Using Pay Pal, lenders can choose from the proposals on the site and make loans to the businesses in increments of $25 or more over the site. The money gets to the businesses through the MFIs, which insure that the funds get directly to the business owner. The money is also repaid through the MFIs and deposited back to the lender’s Kiva account, where it is available to be loaned again.
Lenders can also opt to make a very small donation from their account to help cover the operating expenses of the site, usually around 5 percent, according to Larson.
Larson said that many of the proposals get their first review by village elders who determine if the plan is sound enough to be sent on to the MFI. A majority of the loan requests are made by women, about 78 percent, and the loan amounts average around $400 but can range from a few hundred dollars to over $1,000. Larson said most are fully funded within two days of their posting. Most are paid back in full within nine months. The default rate on loans is 1.4 percent. The lenders have funded more than $83 million in projects.
“In a lot of cases, the small loans these people get can more than double the family income. A lot of these people aren’t making more than a dollar or two a day. Doubling that can make a world of difference, especially for their children,” said Larson.
To date, Larson has made 47 loans, mostly in Africa, for agricultural projects, and mostly to women. All have been paid back or are being paid back according to the loan terms.
Larson says he grew up poor on a farm in southern Minnesota, where his father was a sharecropper. He said he is grateful for the opportunities he has had in this country and believes in paying his good fortune forward. “It kind of puzzles me that more people, people who can afford to do something like this, don’t.”
Larson encourages people to check out the Kiva Web site, which not only includes profiles of those seeking loans, but also of the MFIs and journal entries from lenders and borrowers.
“This has been a great experience — a chance to put my money right on the ground where it is most needed. This isn’t like the big funds that tell people what they should do. This is just the opposite. It is a way to help them do what they are good at and what they believe in.”
For more information about Kiva, or to become a lender, go to www.kiva.org
Comments