Kiva

Ecuador – Jordan – Senegal

These are three countries to which I’ve just lent some money.  In reality, I actually just lent $25.00 each to small businesses located in each of those countries.

Thanks to the non-profit organization, Kiva, people around the world, like me, are able to lend money to small businesses around the world – all in increments of $25.

It’s called micro financing.

According to the website microfinancinginfo.com, micro financing is defined as “banking the unbankable, bringing credit, savings and other essential financial services within the reach of millions of people who are too poor to be served by regular banks, in most cases because they are unable to offer sufficient collateral."

It goes on to say that “(Micro credit) is based on the premise that the poor have skills which remain unutilized or underutilized.  It’s definitely not the lack of skills which make (sic) poor people poor…charity is not the answer to poverty.  Unleashing of energy and creativity in each human being is the answer to poverty.”

Successful organizations such as the Grameen Bank in Bangladesh and Kiva.org based in San Francisco, CA, have been micro lending to small business owners for years.  Grameen Bank got its start in the mid-1970s when its founder – and Nobel laureate, Muhammed Yunus - lent $27 to a group of 42 families during a famine in 1974.  They used that money to create items to sell without being beholden to larger banks that would employ more predatory tactics for the repayment. 

Using that as an inspiration, Kiva.org actually works as a central location for potential lenders (e.g. people like you and me) to connect with regional lenders and the small businesses around the world that they service.

Kiva has “a mission to connect people through lending to alleviate poverty.  Leveraging the internet and a worldwide network of micro finance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world.”

With Kiva, I basically have $100 in loans floating in their system.  What started as a small handful of loans has blossomed into a continued pattern of lending to more and more businesses in need.

While I do my best to support the local businesses here in Grandview, I do also like all things international.  Lending to small businesses via Kiva lets me support people around the globe without just giving people a handout.  Micro lending is exactly that: lending.  That implies a repayment.  After I make a loan, I receive regular updates regarding repayments. 

The loans I make are primarily backfills of loans first made by lending institutions that are local to the businesses I choose to support.  An example of a loan I made today is to Julian in Otavalo, Ecuador.  He makes handcrafted musical instruments and needed a $600 loan to purchase wooden tubes and a two-HP motor.  The money was disbursed to him on October 10 and he now has 12 months to pay it all back.  The loan itself was just listed on Kiva today and already 24 different people each lent $25 to cover it.  Now the local lending institution can lend more money to local businesses and those of us who backfilled this one will be paid back over the course of the next 24 months.

As money is paid back, I can either get my actual money back or I can choose to re-lend it, which is what I typically choose to do.

I try to make it a point to lend to a different country each time - for variety’s sake, I guess!  I’ve lent money to businesses though based on the country, the gender of the owner, payment terms, loan amount or even the type of business – basically, whatever fits my mood at the moment.

So far, I’ve lent to the following countries and businesses.

Paid off:

Peru - Seamstress

Congo - General Store

Cambodia - Grocery Store (this country was chosen because I work with someone who is half-Cambodian)

Repayments in progress:

Ukraine - Retail store

Tajikistan - Grocery store

Palestine - Photographer

Jordan - Animal Sales (Livestock)

Ecuador - Musical Instruments

Still raising funds for the loans:

Senegal - Clothing sales

Personally, I think it’s pretty cool that I can help small businesses out this way.  I’m in there as RPCVBG, so you’re welcome to check out what I’ve done with regard to lending. 

Better yet, you’re welcome to check out what YOU can do!