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Kiva Loans Capital to World's Poorest

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.

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Round of Applause for Kiva.

Total value of all loans made through Kiva:$127,153,360
Number of Kiva Users:689,241
Number of Kiva Users who have funded a loan:438,704
Number of countries represented by Kiva Lenders:194
Number of entrepreneurs that have received a loan through Kiva:320,050
Number of loans that have been funded through Kiva:177,921
Percentage of Kiva loans which have been made to women entrepreneurs:82.31%
Number of Kiva Field Partners (microfinance institutions Kiva partners with):111
Number of countries Kiva Field Partners are located in:54
Current repayment rate (all partners):98.47%
Average loan size (This is the average amount loaned to an individual Kiva Entrepreneur. Some loans – group loans – are divided between a group of borrowers.):$396.63
Average total amount loaned per Kiva Lender (includes reloaned funds):$184.66
Average number of loans per Kiva Lender:5.37

Congratulations Kiva! Your doing it! All the statistics look good and I bet you are giving opportunities to many thousands of less-fortunate entrepreneurs world-wide. But there are a few statistics to consider. There are 689, 241 users of Kiva and there are roughly 8,000,000 million just in New York City alone. In addition, out of those 689,241 users, 438,704 users funded a loan. Finally, there are 320, 050 entrepreneurs to receive loans. Hypothetically speaking, what if the whole of New York City, in addition to the 438,704 Kiva users already loaning, loaned 25$ a piece? Wait. Do the math. Yea, the potential is incredible. Don’t stop there Kiva!

http://www.kiva.org/about/facts

http://en.wikipedia.org/wiki/New_York_City

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3 Reasons Why Kiva Works

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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Kiva has now lent $11 million in Microloans

In the two years since it’s founding, as of this September, Kiva has distributed $11 million dollars in the form of 17,000 microloans to entrepreneurs in developing countries.

It took Kiva.org just over a year to lend out their first million but they’d lent their second only a month later. The average size of a Kiva microloan is $649.63 and their repayment rate is and astonishing 99.59%.

Kiva partners with 64 microfinance lenders in 37 different countries. Through the site, lenders can make loans of as little as $25, money is then transferred to the partner organization to be distributed and to follow up on the loan. Kiva.org is the only site that PayPal has waived it’s usual fees for.

Unlike other microfinance sites, Kiva does not charge interest on their loans so they are truly running a charitable program. Unlike conventional charitable donations however, the vast majority of investors at least get their money back. It seems like this idea is one that people can get behind. After the site was featured on ABC World News Tonight, the site got 1,000 new members and $100,000 in contributions overnight. What other charity gets growth like that?

I got my info from this article on ReadWriteWeb: http://www.readwriteweb.com/archives/kiva_11_million_in_loans_to_developing_nations.php

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Kiva

Kiva is a nonprofit, p2p microloan company designed to promote entrepreneurship in developing countries.  Founded in October of 2005, Kiva has financed US$21 million worth of loans coming from 242,000 lenders.  You can be a lender.

The Kiva team initially focused its funding on the country of Uganda but has since opened up the offering nationwide.  At Kiva.org you’ll find a loan profile and will have the opportunity to lend an amount as small as $25 to the cause.  In the name of promoting entrepreneurship, no interest rates are charged, but 99,7% of donations are repaid within 12 months.

A sample loan profile from Wikipedia is available below:

Fisherman seeks refrigerator

  • 51 year old fisherman with three children in Azerbaijan
  • 12 years of experience
  • Seeks 12 month loan for $725 USD in order to purchase a refrigerator
  • Has already successfully repaid two prior microloan

Kiva.org represents the ultimate aha!  By leaving our money in 1-2% checking and saving accounts we’re actually losing money to inflation on a yearly basis.  By donating a small sum to a developing venture you have the chance to be part of an international phenomena – Kiva.org “loans that change lives”

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