Kiva

Have you ever heard about Kiva?

Kiva is a non-profit organization aiming to alleviate poverty by empowering individuals to lend some money to those in need of capitals to improve their lives.

Since inception in 2005, the organization has more than 1 million lenders, more than $500 million in loans, 98.96% repayment rate (statistics taken from www.kiva.org).

How does it work? In brief, after a loan is made on Kiva, it will be disbursed by the assigned Field Partners (microfinance institutions). Throughout the life of the loan, progress update will be made through the website and sent through emails. Borrowers will then repay the loan (either in full or in instalment) and the money will be made available in the lenders' Kiva account. Finally, the money can be withdrawn, donated or used to fund another loan.

Before we choose to part ways with our hard-earned money, of course due diligence is in order. There are some risks involved in lending through Kiva: borrower risk (they may have issues like crop failure or health issues that prevent them from repaying the loan), Field Partner risk (bankruptcy, operational difficulties), country risk (currency devaluation, natural disasters).

All these background, history and statistic are easily accessible in their website, www.kiva.org.

Now, what about my personal experience?

I've been lending through Kiva since early 2012. In the beginning I chose 2 borrowers and loaned $25 to each. Whenever I have enough Kiva credit from the money repaid, I'd select another borrower to fund another loan (the minimum amount you can loan is $25).

Being patriotic, the first loan that I made was to a retail group in Jakarta. The next one was to a lady opening a food stall in Bolivia. And after that: someone selling clothes in the Philippines, someone opening grocery store in Ghana, a lady who needs loan to buy fertilizer for her fields and feed her cattle, and a lady doing cosmetics sales.

From the 6 loans I made, 2 of them are currently being repaid, 2 are already paid back in full and 2 ended with loss - 1 of them is attributed to currency exchange loss, and another is due to delinquency (no prize in guessing which borrower committed this).

So far I'm happy enough that I can make a difference to some people, albeit very small.

Now and then Kiva gives bonus to make a loan for free.. so if you're thinking of joining Kiva, do let me know so I can invite you!

"I alone cannot change the world, but I can cast a stone across the waters to create many ripples." (Mother Teresa)