Web-based microfinancing helps poor entrepreneurs Get On Their Feet.
Kiva, which means “unity” in Swahili, a web-based non-profit incorporated in November 2005, lets anyone lend money directly to a specific needy person in a developing country.
Recipients of a Kiva Loan are referred to as "entrepreneurs" or "borrowers", contributors to a Kiva Loan are referred to as "Kiva Lenders". The key word here is: Loan. The loan allows the entrepreneur to boost themselves out of poverty. Lenders can loan as little as $25. Lenders also receive updates and get repaid when the business succeeds. Loan terms range from 4 months to 18 months. Currently, at repayment lenders receive no interest on their loan, this might change in the future. Astonishingly, the repayment success rate is 99.86%. This means that only 0.14% of all entrepreneurs default on their loan. Take a moment to let that success rate sink in. I will tell you how they are so effective in a second.
Funds. According Kiva’s website, since inception and as of January 30, 2008, Kiva has distributed $20,999,835 in loans from 239,127 lenders. A total of 31,864 entrepreneurs have been funded. The average loan size is $568.19.
How it works. The loan success rate is so high because every entrepreneur is interviewed and screened by a Kiva “Field Partner.” Kiva currently has 78 partners in 40 different countries. A partner can be a volunteer, an aid worker or anyone from an established community service institution. After the entrepreneur is interviewed and approved, the Field Partner posts a profile of the qualified entrepreneur on the Kiva website. Lenders browse and choose the entrepreneur they want to fund. Kiva then forwards the funds to the Field Partner who gives the money to the entrepreneur. The Field Partner also collects loan repayment funds and forwards the money upstream to the original lender. Often, when the original lender receives funds they re-contribute to another needy entrepreneur.
Matt Flannery, the founder of Kiva, says: "philanthropy of this kind can become addictive, especially as lenders know they will see their money again. By choosing a business on Kiva.org, you can "sponsor a business" and help the world's working poor make great strides towards economic independence.”
Kiva, which means “unity” in Swahili, a web-based non-profit incorporated in November 2005, lets anyone lend money directly to a specific needy person in a developing country.
Recipients of a Kiva Loan are referred to as "entrepreneurs" or "borrowers", contributors to a Kiva Loan are referred to as "Kiva Lenders". The key word here is: Loan. The loan allows the entrepreneur to boost themselves out of poverty. Lenders can loan as little as $25. Lenders also receive updates and get repaid when the business succeeds. Loan terms range from 4 months to 18 months. Currently, at repayment lenders receive no interest on their loan, this might change in the future. Astonishingly, the repayment success rate is 99.86%. This means that only 0.14% of all entrepreneurs default on their loan. Take a moment to let that success rate sink in. I will tell you how they are so effective in a second.
Funds. According Kiva’s website, since inception and as of January 30, 2008, Kiva has distributed $20,999,835 in loans from 239,127 lenders. A total of 31,864 entrepreneurs have been funded. The average loan size is $568.19.
How it works. The loan success rate is so high because every entrepreneur is interviewed and screened by a Kiva “Field Partner.” Kiva currently has 78 partners in 40 different countries. A partner can be a volunteer, an aid worker or anyone from an established community service institution. After the entrepreneur is interviewed and approved, the Field Partner posts a profile of the qualified entrepreneur on the Kiva website. Lenders browse and choose the entrepreneur they want to fund. Kiva then forwards the funds to the Field Partner who gives the money to the entrepreneur. The Field Partner also collects loan repayment funds and forwards the money upstream to the original lender. Often, when the original lender receives funds they re-contribute to another needy entrepreneur.
Matt Flannery, the founder of Kiva, says: "philanthropy of this kind can become addictive, especially as lenders know they will see their money again. By choosing a business on Kiva.org, you can "sponsor a business" and help the world's working poor make great strides towards economic independence.”
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