If you are not familiar with Kiva, here’s a brief overview of how Kiva.org works. In a nutshell Kiva.org uses the internet as a medium between impoverished entrepreneurs across the globe who are unable to raise funds and match them with everyday people to serve as microloan lenders. you may say there is know way I am going to loan my money to some poor entrepreneur in a in a third world country. It will just be squandered and I won’t ever see it again. Here’s why you should change your mind.

REASON 1: Kiva Appropriately Targets Stable But Needy Economies/Communitieskiva_logo1

Microfinancing is not an appropriate approach to take to help solve world poverty in all communities. Environments where there are conditions such as wide geographical disbursement and disease make repayment difficult and are thus are inappropriate environments for microloans. Rather Kiva creates partnerships with hundreds of existing microfinace instiutions to ensure effective use of the microloans.

REASON 2: Kiva Ensures Reliable Entrepreneurs

Not only does Kiva utilize and partner with existing microfinance firms in economically viable communities, but Kiva also builds relationship with people with a passion for microfinancing as a cure for poverty. These people are call “Kiva fellows”. Kiva fellows work to…

  • Facilitate Connections between Kiva’s Borrowers and Lenders
  • Assist Communications and Maximize the host Microfinancing Institute’s Partnership with Kiva
  • Support Kiva’s Mission and Procedures Through Actively Participating in the Kiva Community

The primary role of a Kiva Fellow is to to find and support reliable, viable, and motivated entrepreneurs in areas of poverty in need of microfinancing.

REASON 3: Kiva Makes Microfinancing Interactive and Potentially Profitable

Another specific and important role of the Kiva Fellows are to  update the Kiva Blog on the progress of the work Kiva is doing and promote of how the microfinancing institutions are using the lenders money. The information and relationship Kiva Fellows develop with the businesses using the microloans makes possible the niche of Kiva.org to allow lenders to follow the progress of the borrowers they are supporting. By promoting healthy and transparent interaction between lenders and entrepreneurs Kiva is able to bost an average return on investment of 5.5% which is typical of normal banking.

KIVA’S SUCCESS

Kiva has successfully and conveniently made possible microfinancing on a large scale and relational level through the internet. This has allowed microfinancing to make a large and growing impact in the fight aginast poverty. Microfinancing works by allowing low-income communities to grow in economic welfare and enterprise stability. It also helps gender equality by economically empowering women.

Kiva and microfinancing is not the sole solution to world poverty, but it is an important and powerful tool in making a large impact in the battle against world poverty. I haven’t yet, but am looking forward to supporting Kiva’s cause by participating as a lender. You should too.




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