Posts Tagged ‘Kiva’

Kiva Update

Saturday, December 6th, 2008

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 Kiva.org and post photos and profiles of low income entrepreneurs in need of money for their businesses.

Lenders like myself go to Kiva.org 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

Kiva Gift Certificate Give Away

Tuesday, October 9th, 2007

I’ve talked about micro-credit lending programs and the positive impact they have on poverty and justice issues. I love the concept and have invested my “loan dollars” through an organization called Kiva. When I started they were little known and had far more loan requests than lenders like myself. This all change recently with the release of Bill Clinton’s new book “Giving” where Kiva is highly touted. They have become known!

You can read a couple of my posts on the subject including, Dr. Yunus, “Banker to the Poor” and Kiva Update.

You can learn more about Kiva here.

I’m so sold on this concept that I’d like to introduce it in a practical way to two people. I’m going to do this by giving away two US$25.00 Kiva gift certificate that two people can use to make their first micro-credit loan through Kiva.

It is open to anyone who reads this blog. The only condition is that you have never used Kiva or any other micro-credit program to make a micro loan and that, if you have a blog, you post on your experience at some point in the future.

If you’d like to be one of the lucky two, just leave a comment on this post. I’m not sure how I’ll decide if I get more than two comments (which I hope I do), but it will be fair, if subjective.

Comment away!

Kiva Update

Wednesday, July 11th, 2007

I’ve posted on my experience with micro-lending through Kiva in the past including here.

I started my loan portfolio in October 2006 with the plan of adding a small amount of new money each month and making a new loan or two from that amount. At some point, loans would begin to be repaid. When they did, I’d roll those funds back into new loans instead of adding new funds. At some point my hope is that no new funds will be needed.

Well, in June and July some of my first loans were paid off and so I didn’t have to add any new funds in those two month. A number of other loans are getting close to being paid back, so there may not be to much need for additional dollar, which will help my budget :-).

According to Kiva, here is what my loan portfolio looks like:

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Portfolio Distribution

Gender
Female 68.8%
Male 31.3%
Country
Ecuador 43.8%
Kenya 12.5%
Nigeria 6.3%
Togo 6.3%
Afghanistan 6.3%
Bulgaria 6.3%
Mozambique 6.3%
Ghana 6.3%
Honduras 6.3%
Sector
Retail 31.3%
Food 31.3%
Clothing 18.8%
Agriculture 12.5%
Services 6.3%

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If you haven’t looked into micro-lending as one way to help reduce world poverty, please do check it out by clicking on the Kiva banner in the right hand column.

Micro-Lenders Evaluated

Tuesday, March 20th, 2007

Slate magazine recently asked the question, “Which microlenders cater to individual donors? And which is the most satisfying place to sink my dime?” Jude Stewart in, “A Good Run for Your Money,” decided to find out. Using three criteria: User Experience, Trust, and Effectiveness, she evaluates six microlenders. And winner is…. Kiva (narrowly)!

You can read about my experience with Kiva at “Dr. Yunus, ‘Banker to the Poor’.”

Dr. Yunus, “Banker to the Poor”

Tuesday, March 6th, 2007

I’ve just finished Dr. Muhammad Yunus’s book, “Banker to the Poor.” For those who don’t know Dr. Yunus, he is an economist who founded the Grameen Bank, which pioneered micro-credit lending programs for Bangladesh poor, especially women. For his work with Grameen Bank he won the 2006 Nobel Peace Prize.

The over 270 pages is broken into 14 very readable chapters. The first couple deal with Dr. Yunus’s childhood through his college years in America on a Fulbright scholarship. But the majority of the book deals directly with his awaking to the plight of what he calls the hard-core or absolute poor, his initial attempt to help (lending $27.00 of his own money to 42 people), his first regional project which eventually led to the founding of the Grameen Bank.

It seems like a simple solution that Dr. Yunus hit upon, but there have been and continue to be many structural obstacles. He writes, “In both rich and poor countries alike, credit institutions have favored the rich and in so doing have pronounced a death sentence on the poor. Why have economists remained silent while banks rejected the poor as unworthy of credit? Nobody can provide a convincing answer. Because of this silence and indifference, banks have imposed a financial apartheid and gotten away with it. If economists would only recognize the powerful socioeconomic implications of credit, they might recognize the need to promote credit as a human right.”

I really think micro-lending is a powerful tool for good and justice and Dr. Yunus’s story and work is worth leading about. In reading this book you will learn some important insights and gain a unique perspective on the poor and their willingness to work.

Kiva Update

To put feet to my belief, I joined Kiva (Kiva.org) last fall and started funding micro-loans through their network. Since I can’t afford to put a large amount into loans up front, I’ve been funding a small amount each month. I just did my March funding and now have loans to 11 individuals. Eight have started repayments and two are over 50% paid off.

I’m curious to hear from others who know about or participate a micro-lending scheme.

  • What has been your experience?
  • Who do you work through to make or fund loans?
  • Any downsides or cautions others should know about?