Organizations like Kiva and HOPE International are at the forefront of a unique and relatively recent model for charitable giving. Traditionally, money given to benefit the poor in other countries around the world meant paying for charity organizations to work in communities to provide food, clean water and other forms of relief. The problem here is that the donation only goes so far.

There is an old saying that goes something like, “You can either give a man a fish and feed for a day, or teach him to fish and feed him for the rest of his life.” What this means is that while giving is a good thing, it isn’t sustainable. Micro financing fits better into the second half of this saying. The basic concept is that small donations are compiled into relatively small loans, usually ranging from a couple hundred dollars to a couple thousand. This money is given to entrepreneurs in poor countries to help them start a self-planned business. Examples are the cost of a bicycle so that they can deliver groceries or the start-up costs of a small street vendor. With a very high payback rate (both Kiva and HOPE claim 98-99% rates), donors know that they are giving to a worthwhile cause, and can even reinvest the money after it has been paid off!

Visit these two great organizations’ sites to help out your fellow entrepreneurs around the world:

www.hopeinternational.org

www.kiva.org

I have been an long time support of Kiva.  It is a great company that makes it so easy to help other people. It empowers people by allowing them to give money to back up micro loans that would otherwise be to risky to do without Kiva guaranteeing them. Kiva has exploded since it creation.  Kiva has allowed hundred of other get ministries to form because of Kiva.  Kiva is the Ebay of ministry.  Kiva has a whole page of plugins people have created on Firefox for Kiva.  It has allowed ministries such as World Vision to find people who could really use loans and use the Kiva platform to fund their client.  Alalay sa Kaunlaran, Inc. is a company that was founded in 1986.  It was started by a group of Christian businessmen who wanted to help with Philipians issues with poverty and unemployment.   Kiva has given this group of businessmen the tools and resources they need to effectively minister to their community.  Alalay sa Kaunlaran has been on Kiva since 2008 and they have loaned over 2,000,000 dollars on Kiva.  Kiva has revolutionized the way people raise money for 3rd world businessman.  Kiva is a perfect example of how powerful the internet is.  Kiva was an origination that wanted to get involved in micro financing, but because of the power of the internet.  Kiva has allowed normal people to kelp a taxi drive in the Congo receive a loan to fix his car.  Or another example would a boy from Ohio can help father with 6 kids build his house.  Kiva and the internet has opened up huge opportunities to help people who really need loan.

By Ford Jordan
FordJordan.com | SEO, Webdesign, Sports, and Business

Kiva.org is an innovative non-profit organization that takes entrepreneurs from some of the most poverty-stricken areas of the world and essentially gives them the capital to start their own business.  Kiva uses their website as a marketing tool, a weblog, and a means by which members can monitor how much money they’ve lent and to whom.

One aspect of Kiva.org that I believe is a very useful marketing tool is their “Community” tab.  Kiva allows members to join various “Lending Teams” and pool the money they’re lending together towards whatever cause or dogma they uphold (i.e. Kiva Christians, Team Obama, Gay Lesbian Bisexual Transgender, Team Europe, etc…).  Each respective team is ranked against other teams by how much money they’ve raised.

I like the way Kiva’s purpose is to help the poor by creating virtual VCs in order to create accountability, and their site does an excellent job of turning the cause of raising money into a competition between various regions, belief systems, and (in the case of GLBT) sexual preference.

Kiva is a website where entrepreneurs post their business ideas in hopes of getting an investor in the company.  There are entrepreneurs all over world seeking money to help start up their businesses. Kiva is based on the generosity of people and it promotes dignity, responsibility, and transparency. Kiva has generated over $100 million in loans to entrepreneurs. Lenders look through the profile and send money through paypal or a credit card to that person. I personally would never get involved in this because you only read a small profile and do not get to actually talk to the person. If the person did not repay, it would be a headache to go through getting a couple hundred dollars back or even a couple thousand. I think the website is a good idea, but is just something I would never get involved in.

The concept of micro-finance has been around since the 1970′s but it didn’t take off until recently when the Nobel Peace Prize was awarded to Professor Muhammad Yunus who worked to build up a micro-credit system in Bangladesh.

Micro-finance’s success is linked to the soundness of its business model. Unlike most charities which lack focused direction or sustainability, good micro-credit organizations rely on their lenders having sound information about the bowers and a proven system for making sure the borrowers pay back their loans. This type of charity, one based on generating real, measurable results has enticed many philanthropists who want to see their money benefit lives rather than be wasted on organization’s overhead costs.

Kiva has found a way to connect the various lending groups through a community site aimed at making donating easier and connecting lenders and borrowers through the power of the internet. Kiva allows lenders to see pictures and stories of the people they are lending to and see what each borrower intends to do with the money they will receive. Kiva has taken a fragmented industry and found a way to connect it through the creation of an online community. That is the genius of Kiva.

To learn more about the world of micro-finance and micro-credit I would suggest reading “A Billion Bootstraps” by Phil Smith and Eric Thurman.

Kiva.org is a relatively small non-profit company with huge plans for the world. The San Francisco based organization posted to their website that they have lent over $125 Million to over 300,000 entrepreneurs around the world. These are rather impressive numbers when you consider they are non-profit and have been around for a little less than 5 years. But the real question is why would some lend money to a complete stranger without the benefit of interest?

It basically comes down to the type of person you are. We are undoubtedly called to help our fellow man and Kiva provides an easy and safe platform from which to do this. 98+% of the time the lenders get fully repaid. Yes, that is not an ideal number but given the motive one should have to lend via this site in the first place, 98% is pretty good. More than 300,000 people have felt the need to donate and more are coming everyday. Maybe this world does have some sliver of hope left? …