Thursday, 19 July 2012

Practical Charity - Kiva Loans!

I'm a fairly community minded type of person and always end up donating a fair bit of time and money to various causes. I am studying in this field and over time have come to enjoy helping those who want to help themselves, in more practical ways.

For one of my Uni assignments, I had to write a report on a development organisation (that is an organisation that helps move a community forward by education, physically building something and/or empowering the people). One of the organisations I looked at was called KIVA.



Kiva is an organisation that helps you lend money to entrepreneurs in developing countries. We have similar organisations here in Australia (NILS - No Interest Loans Scheme) but an individual like you or me, is unable to donate money to the scheme to help people buy a fridge, fix their lawn mower or washing machine and improve their life. With Kiva, you can pick who you would like to help, what enterprise you would like to support in whatever country you choose.

The difference between Kiva as a development organisation, and a charity like Red Cross, that you make a donation to, is that the Kiva loan recipients actually pay you back! And then you can loan the money to someone else in the Kiva world... That's an idea that really appealed to me!

I have chosen to make a loan of $25 each month in 2012 as part of my charitable activities this year - and as my entrepreneurs pay me back, I reloan the money to a new entrepreneur. Its great fun!

Here's what I did...

First, you log onto Kiva.org

Have a look around the site and if you are comfortable with what they do and decide that you will participate, then you can make a loan. There is plenty of information about the organisation on their website to read and a video that explains the lending process as well.

Click on the various entrepreneurs who are looking for loans (there are usually a few thousand up for grabs) and choose one.

You are expected to contribute only $25 to each loan. So if Marucia in Peru needs $300 (US$) to upgrade her paddocks and get better crops you will be one of 12 people who will lend Maurcia the money. The repayments rates are over 98% so you have a very good chance of getting your money back to lend or to spend. If you don't happen to get it back - you have only lost $25 not $300.

Once you have chosen a person to lend to - you simply click on the orange "LOAN NOW" button. This will take you to a registration page and then ultimately to a Paypal or secure credit card payment page. They will also ask you for a donation of about $3 for the running of the Kiva organisation as all of the $25 will go to the entrepreneur. I usually make the donation on top of the $25.

After you have made the loan, it will appear on your very own Kiva page and you can track the repayments and any updates that the loanee makes. You can also invite your family and friends to have a look at who you are lending to and encourage them to make their own loans if they want to. There is also the chance to get $25 trial loan.

Kiva is not the organisation making the actual loans to the actual people in the pictures. Kiva is more like e-bay in that they link the seller and the buyer via a website. In the case of Kiva, they link the armchair lenders (that's you and me) with people who want to get a loan via a microfinance organisation in their country. Kiva passes on the $25 you loan to the micro finance organisation who in turn loan to the actual person.

I have made seven loans so far this year - two have been repaid already - and have had no hassles at all. As the loans have been repaid, I get credit in my Kiva account. I can withdraw this money into my Paypal or credit card and use it to go out for dinner - or I can reloan it to another Kiva entrepreneur. And that's what I have been doing. By the end of the year I will be recycling my money and making more loans with out having to put in any more of my own funds into it.

There is quite a bit of info about Kiva on the web - who started it, why and how - for those who like to know this sort of thing. They also have information on their website about the micro finance organisations across the world that they work with.

Kiva's statistics are reasonably impressive:

Latest Statistics*


Total Amount of all loan purchases made through Kiva:$331,851,500
Number of Kiva Users:1,210,089
Number of Kiva Users who have funded a loan:785,372
Number of countries represented by Kiva Users:220
Number of borrowers that have received a loan through Kiva:819,718
Number of loans that have been funded through Kiva:447,881
Percentage of Kiva borrowers who are women:81.49%
Number of Kiva Field Partners:154
Number of countries Kiva Field Partners are located in:63
Current repayment rate (all partners):98.98%

(Downloaded July 12 2012)

If you want to have a look at my Kiva page click here

Kiva is a great way to support people who are doing it tough on the other side of the world - from your armchair! Have fun!

Score card:
Green-ness: ?/5 I'm guessing its fairly green but can't think why at he moment...
Frugal-ness: 5/5 Very frugal to help a charity over and over with the same money!
Time cost: 1 minute to all day - depends how long you spend trying to decide who to help!
Skill level: If you can buy or sell on e-bay then you are well equipped to lend on Kiva!
Fun-ness: Heaps of fun! (and quite addictive)

2 comments:

Gladys in the Garden.blogspot.com said...

Hello Kara
I have to confess that I have been a bit sloppy. I've only just done my One Lovely Blog Award. Thank you again for nominating me. x

Practical Frog said...

Youre welcome! Its all good. The awards are fun - or should be rather than a burden! Enjoy the glory and know that I think your blog is great! - K xx

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