On our winelands tour we met up with four people who are working for Kiva. Three of them were based in Kenya, one had joined them from Turkey, and they had all travelled to Cape Town for a short break. I hadn’t previously heard of Kiva, so they explained that it was a non-profit organization that uses crowdsourcing to provide microfinance to small businesses in developing countries.
From their website: Kiva Microfunds (“Kiva”) is a nonprofit, tax-exempt organization founded in 2005 with a mission of connecting people through lending to help alleviate global poverty. Kiva empowers individuals (“Lenders”) to lend to low-income borrowers around the world. Kiva partners with a global network of Microfinance and other institutions (“Field Partners) to help identify, select and support borrowers across the 65+ countries where Kiva works.
This seems like a good idea. Regular readers of this blog will know that I am quite cynical about many charities, though I support some, such as Mary’s Meals, and Book Aid International.
The people from Kiva explained how their website worked. They said that each person seeking finance featured in a story on their website, with a photo and an explanation of how they would put the loan to work. Potential lenders could choose which people they wanted to support from the information provided.
I asked them whether this meant that the cute looking ones received the most loans. They said that there might be an element of truth in this, but that they always encouraged those seeking finance to smile when they had their photo taken. This, they said, sometimes caused a bit of confusion, as the people responded, “Why should I smile before I get a loan?”
As a lender, you don’t get interest on your loan, and there is no guarantee that it will be repaid, but the historic repayment rate is 98.75%
Kiva works with various Field Partners, who are responsible for screening borrowers, posting loan requests to Kiva, disbursing loans and collecting repayments, and otherwise administering Kiva loans.
What sort of people/groups seek loans through Kiva? I noticed the following:
A portion of Truth Group’s $1,300 loan helps a member to buy more maize, corn and cassava dough to prepare banku to sell.
A loan of $1,150 helps Salamatu to increase her inventory of groundnuts.
A loan of $525 helps Ronald to buy tea and clear land for farming.