Micro-Lending with Kiva
Even a Small Loan Can Help Start a Business
Kiva allows any individual to make a small loan to help a new business in a developing country. You can help reduce poverty, one person at a time.
If you are a socially-conscious person, you may wonder how a single person can really have any true impact on global issues of poverty, economic development and unemployment. One answer is in a new financial system called “micro-lending”. Loans can be issued to individuals trying to start or improve their own businesses in order to better support their families. And you can access this system through a website called Kiva.
Most loan requests are under $1000, but each individual who lends money can lend as little as $25. With so many generous lenders involved in these types of projects, most businesses have their loans filled within a few days. It may not seem like a few hundred dollars would make any difference to a new business, but remember that the economies of some 3rd world countries are very different than in North America.
The process is very simple and almost completely painless.
How it Works
Go to the Kiva website,and browse through all the available projects and businesses that are in need of funding. You can see pictures of the indivduals and usually get a look at their store or business area. There are businesses in retail, agriculture, construction, and many other fields. Many of the entrepreneurs are women. Read about their intentions and situation. When you find a business you'd like to support, you simply click on “Lend”. The money is taken from your credit card or Paypal account.
Kiva is partnered with many smaller financial institutions around Europe, Asia, South America and Africa. Your money is transferred to these micro-lending banks and distributed directly to the person who requested the loan.
Your Money is Repaid
The best part of the process is that it is a true loan, not a donation or charity. You will receive reports on your loan, as it is repaid. Once the full loan amount has been paid back (usually 6 or 12 months), you get your money back. There is always the risk that the person who received the money will default (not common) and you may not see your funds again.
When the loan is repaid, you can either withdraw your money or just use the same funds to support another small business. You can continue to help one business after another without any additional financial outlay on your part.
This is a very exciting way for you to directly contribute to the improvement of someone's life in a sustainable way.
