I think that as IPE students, we have an especially keen sense of the ways in which the internet makes the world more interconnected. With the rise of Skype, Facebook, and blogs it seems that internet utilities tend to be used for socializing, not fostering social change. Kiva.org caught my eye because it uses tech tools and social dynamics to tackle real world problems.
Kiva raises money from individuals across the world and funnels it to small businesses in less developed countries via microfinance institutions. Kiva is not the only organization that does this. Prosper, Accion, Grameen, and Trickle Up are similar organizations. What makes Kiva unique from its competitors is the connection that you have with your borrowers. Go to Kiva’s website and there are profiles of hundreds of entrepreneurs from all over the world that are trying to raise money. The catalog is being updated constantly, the average borrower raises funds for their project within a single day. On the website, you can look at their pictures, evaluate their business plans, and if you decide to loan to them, you receive regular email updates about the status of repayment. Also, you can go to the website and review the borrower’s journal entries.
Your money is not a donation, it is a loan. You can pay as little as $25 to a butcher in
, for example, and your money will be returned to you once they repay their loan (usually between 8 and 24 months). Kiva partners with microfinance organizations across the world that administer the loans. Started as a side project in 2004 by a married couple, neither the individual lenders nor Kiva takes a cut of the interest, saving it all for the local lender to administer to the borrowers day-to-day. Payment is easy, it accepts all credit cards through PayPal. I suggest that you go check out Kiva’s website. It’s pretty easy to get sucked in...and then part with a couple of bills for a little while. Paraguay
Thursday, January 03, 2008
Kiva.org: Person to Person Microcredit
Nick White (IPE class of 2007) is a microfinance expert. He spent a summer studying microfinance projects in South America, worked on microfinance programs for Tacoma's Latino community, and wrote his senior thesis on the changing world of microfinance. Recently Nick has begun to experiment with Kiva, on online resource that lets individuals engage in person-to-person microfinance transactions with third world entrepreneurs. I asked Nick to talk about his Kiva experiences. Here is what he had to say.