Kiva Update

Kiva is a micro-finance organization that I’ve been part of for almost two years. If you are not familiar with micro-finance, you can read my post titled Dr. Yunus, “Banker to the Poor.”

Through Kiva I’ve made 46 loans of which 20 have been paid back in full and 22 are active and payments are current.

I did experience my first defaults last month. Four loans through a field partner in Ecuador had to be written off. Important to note that the borrowers fully repaid the loans, but the field partner who administers the loans kept the funds and refused to forward them on to Kiva. Kiva terminated the relationship.

Here is how Kiva works.

From Ghana to Cambodia, Kiva approved micro-finance institutions (field partners) around the world go to and post photos and profiles of low income entrepreneurs in need of money for their businesses.

Lenders like myself go to and browse through profiles of these low-income entrepreneurs — a dairy farmer in Kenya, a man who wants to open a shoe shop in Honduras, or a tailor in Bulgaria. Lenders can then loan as little as $25 to the entrepreneur of their choice via PayPal.

When a loan is fully funded by individual lenders, Kiva pools the money and transfers it to the field partner who handles distribution and collection of loan payments.

Loan repayments made by the entrepreneur over the course of about 6-18 months are sent back to Kiva by the field partner. As funds are repaid, I can choose to withdraw my principal or re-loan it to another entrepreneur. I always re-loan the funds.

Kiva Loan Process

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2 Responses to “Kiva Update”

  1. Rick, no not a comment on KIVA. You are reading ReJesus.. do you think I have been unfair? (a few entries down on my blog)

  2. Rick Meigs says:

    Len: Unfortunately, I’ve not gotten to ReJesus the book yet. I have only read the introduction and chapter one which were made available by Alan. In light of your comments, I look forward to the full book.