Kiva: Loans that are changing lives

Buying a Car? A house? Starting up a business? Need money for college? I could go on but whatever the reason is, you’re in a situation where you need a loan. You’re looking for a bank to lend you a helping hand and in exchange you will pay them back (in installments) the full amount, plus interest.

Seems like a pretty normal situation.

However, what if that bank was you? What if poor students and entrepreneurs from across the world told you why they needed a loan, how it would help them and were willing to pay you back (with interest)?

Seems like an interesting concept?

Well, that’s exactly what Kiva.org is – a crowd-sourced micro-lending website/platform service that allows individuals (like you and I) to lend money to extremely low income students and entrepreneurs across the globe.

Kiva's Website Home Page

Crowd-sourced micro-lending?

This is the source of how Kiva operates and it’s basically a group of people contributing small amounts of money that equals out into a significant amount.

How does it work?

Kiva Entrepreneur Kumri Orifova

Kiva Entrepreneur Kumri Orifova from Tajikistan

Students or entrepreneurs in places like Peru, Kenya, Cambodia, Tajikistan, etc. connect with their local field partners (Micro Finance Institutions) who have already been pre-approved by Kiva. The MFI then uploads a picture of them to the website along with a small article about what they plan on doing with the money.

Registered users of Kiva’s website are then able to contribute (starting from $25) to the applicants whom they wish to help. Since these are loans and not donations, the money is repaid over time, after which you can either re-invest it into another borrower, or cash out through PayPal.

To get a visual of how a Kiva loan really works, check out this inspirational video “Fistful of Dollars”, created by Kieran Ball (a Kiva Fellow):

A Fistful Of Dollars: The Story of a Kiva.org Loan from Kieran Ball on Vimeo.

Kiva's Matt Flannery (Founder) & Premal Shah (President)

Kiva's Matt Flannery (Founder) & Premal Shah (President)

Kiva was founded in 2005 by Matt Flannery and Jessica Jackley. It’s based in San Fransisco and run by a team experienced in business, micro-finance and technology. Kiva’s president, Premal Shah, was named a Young Global Leader by the World Economic Forum and selected to FORTUNE magazine’s “Top 40 under 40″ list in 2009.

Since their inception, Kiva’s growth has been tremendous. In the summer of 2009, with the recession hitting home, they extended their service to small businesses in the US and most recently to students across the globe needing loans to fund their studies.

As of September 22, 2010 the total value of all loans made through Kiva is at $161,609,925 with lenders representing 206 different countries. 416,768 entrepreneurs have received a loan through Kiva and the current repayment rate is at 98.9%.

At the end of the day, what the team at Kiva has managed to do is amazing. Along with all its lenders (across the world) who care enough to loan their own money to those less fortunate, Kiva has managed to create loans that are really managing to change lives.

Want to become a lender? Register through the Kiva website and get started on giving.

If you’re interested in applying for a micro-loan, you can contact one of Kiva’s field partners located in your respective country.

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