What if you could change the trajectory of someone’s life with just $25? Would you do it? What if you
were 98 percent guaranteed to get the money back?
These are the questions posed by Kiva, an online micro-crediting organization. I first heard about Kiva
through Nicholas Kristof and Sheryl WuDunn’s book Half the Sky, and I have been an enormous fan ever
since.
Here’s the scoop. Kiva is a volunteer-based, non-profit organization with field offices all over the world.
It supplies interested parties with financial capital in order to help fund the applicants’ entrepreneurial
endeavors. This is accomplished through micro-credit, since traditional banks are not readily found in
developing nations.
Here’s where you come in. Financers make a minimum donation of $25 through the website. One
hundred percent of the donation money goes directly to the loan applicant. The donor can browse
the website and make a list of his or her criteria, narrowing the applicant pool by selecting a gender,
a region of the world, an industry, a single individual or a group, credit history, etc.
Then, a list of bios appears:
Walter Yago is 38 years old and lives in the Philippines. He owns a farm and sells rice in the local
markets. He needs $200 to buy seeds and fertilizer to expand his business. His hope is to put both of his
children through college.
Las Reynas Fortelezas is a community bank in Bolivia whose members work in a variety of industries
ranging from sewing to carpentry. The bank uses the loans as a way to empower women and combat
patriarchy. They are 12 percent of the way to raising the $2,625 dollar loan that they requested.
The list goes on.
Next to each profile, the lender can see the amount requested for the total loan, how close the recipient
is to receiving the full sum, the repayment term, the repayment schedule, how much money will be lost
in currency exchange, whether or not the person or group has defaulted on previous Kiva loans, the
recipient’s history and a risk assessment.
Keep in mind that each time I used the word “donation,” what I’m really talking about is a loan. On a
student’s budget? Not sure you can part with $25 permanently? What if you need to buy gas down the
road? That’s the beauty of Kiva. You donate temporarily. The initial $25 goes to the applicant of your
choice. Within their designated repayment term, they use the money that you gave them to improve
their business and turn an additional profit. In a matter of months, they use the extra profit to pay back
the lender and can then apply for another loan if they wish.
That’s right. You get your money back. The hope is that lenders will realize that they didn’t miss the $25
and will invest it again in another start-up. But if you find that you just can’t kick your twice-a-day coffee
habit, and you’re really hurting for the money, your donation will be put back into your bank account in
full.
I donated to a banana seller in Uganda who needs a better irrigation system in order to operate during
the current drought. Within days I was notified that her loan amount had been met, and I would be
repaid in the next six months.
By barely lifting a finger, you can change a life. How cool is that?