Kiva: An Explanation

August 26, 2010 at 7:00 am | Posted in Guatemala, Kiva, Microfinance | Leave a comment
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It recently occurred to me that for all my blog posts, you still don´t really know what Kiva is or what the heck I´m supposed to be doing. (Unless, of course, you are one of the 500 people I have told in person). So, if you are curious or just plain confused, maybe this will clear some of it up.

Kiva is a non-profit based out of San Francisco, essentially a website whose mission is “To connect people through lending to alleviate poverty”. It is a site where you, as a lender can lend small amounts of money ($25, $50, $100) to specific people all around the globe. The best part is you choose where your money is going.

Just think, a non-profit where every cent, every penny that you lend is going directly to the person you intended it to.  Wait, there is more.  Because it is a loan, you get repaid over the life of the loan.  So your $25, $50, $100 comes back to you over the course of 4, 6, 9, or 12 months (whatever the loan terms may be).  Kiva as an overall institution boasts a 98% repayment rate meaning that 98% of the time you get 100% of your money back.  These numbers are incredible considering the circumstances, and considering repayment rates on credit cards in the U.S. are much, much lower.

How it works: Kiva has partner institutions all around the world; these are already established microfinance institutions that are working to better their communities.  The two I am working with in Guatemala are ASDIR and FAPE. These institutions post borrower profiles complete with a pictures and a history (check out one I posted last week here: Visión de Fe).  Lenders, like me!, from around the world check out the profiles and choose to lend to individual borrowers.  Lend to Guatemala here.

Then, every month these borrowers repay the partner institution which in turn repays Kiva and in turn repays you! With the money coming back you can choose to relend to a different borrower, withdrawal it back to your Paypal account, or donate it to Kiva.  And ideally, the field partner sends you updates on the loan after the loan term has ended!

As as a Kiva Fellow, I facilitate these partnerships. Between you and the borrower, Kiva and the partner organization, and you and Kiva!

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