Recently I was doing some research on microfinance and discovered Kiva.org. It may or may not be new to the reader, as it’s been going since 2005, but for me it was a fascinating find. Kiva is a nonprofit organisation which combines the internet, individual philanthropy and microfinance. It’s backed by the Clinton Global Initiative, the Rockefeller Foundation and a host of corporate partners.
Ordinary citizens (usually in the developed world) make a small loan to one of Kiva’s vetted entrepreneurs (usually also ordinary people, this time in the developing world). We’re talking about as little as $25, a similar amount to an average charitable donation. The transaction is facilitated by PayPal, which forgoes its usual fees.
Those individual $25 loans are combined into a larger sum (as of 31 August, the average loan made is $469.95) and that sum sent to a microfinance institution “on the ground”, who pass on the money and general help and advice to the entrepreneur.
Vahobjon, a Kiva entrepreneur in Tajikistan. Photo by juxtapose^esopatxuj.
The loans made through Kiva now exceed $41 million, from 331,372 lenders. Oh, and the repayment rate is an impressive 98.48%. The only catch is that you don’t get interest, at present, anyway.
It should be borne in mind that microfinance is not perfect – see the work of Milford Bateman, among others – but there can be little doubt that it is often has a highly positive impact, on the individual level at least. Kiva.org is a very exciting project and makes for a more tangible, targeted and perhaps more useful way for concerned citizens in the West to help encourage international development. It will appeal especially to those who prefer the “bootstraps” approach to poverty-alleviation.
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