Kiva – An Innovative Approach to Ending Poverty

January 14, 2009

 

Writers are really entrepreneurs at heart.  Our mantra is, If I write it they will come.  As the co-founder of a literary development software company, maybe that’s why Kiva tugs at my heartstrings.  However, I think the real reason is their forward-thinking and use of technology and the web to help put an end to poverty.  Kiva helps entrepreneurs in impoverished countries help themselves.

Charities have been around since the dawn of mankind.  Do they work?  To some extent, but charities mostly serve as a band aide.   Say it with me – "Give me a fish, I eat for a day. Teach me to fish, I eat for a lifetime." The latter is Kiva and I love it!  Kiva uses the web to help third-world entrepreneurs get their businesses up and running by connecting them with average people willing to lend a few dollars.  Their mission is simple: To connect people through lending for the sake of alleviating poverty.  In short, the cost of an average trip to the grocery store here in the states helps a REAL PERSON in an impoverished country make great strides towards economic independence.

How it Works
Kiva vets qualified entrepreneurs through micro-financing institutions. They create a profile of the entrepreneur so you can see the person you’re helping, their skill sets and what business they are creating.  The LOAN amount they need is also posted.  Yes I said "loan". You – and others – lend the budding entrepreneur the money to start their business.  It’s usually not much (i.e. $500, $1000), and is used to buy materials such as nets, seeds, sewing machines, etc.  Now here’s the part I LOVE THE MOST – the borrower PAYS THE LOAN BACK! You then have three options:  You can re-lend the money to another entrepreneur, donate directly to Kiva to help cover expenses OR…OR…you can withdraw the funds!

Technology plays a key role in keeping the costs down so that these entrepreneurs are receiving the majority of the funds.  Traditional child sponsorship programs have high overhead costs.  The reason 15 cents feed a child for a day is because that’s all that’s left after the $2 million dollar infomercial and everyone else is paid. (Not that you shouldn’t give to organizers of child sponsorship.)  But, with Kiva, they use the brilliance of the web to keep overhead down and connect lenders directly with borrowers.  Great thinking!!

An example of Kiva is the profile below of Eufracina of Peru.  She has requested a $800 loan to build her potato farm by using enriching fertilizer to create a stronger crop.  If her profile is gone by the time you click her picture or this link, it means her loan was fulfilled.  There’s plenty of profiles to comb through so you too can lend a hand.

Eufracina is 53 years old, married with no children, but a niece lives with her. When she was single she sold red meat for a living and she continued doing this when married, but later on she and her husband decided to grow potatoes in large quantities. To begin with she did not like this activity but later on she realized that it was better to support her husband, and they both worked and took their products to different markets in the town, and earnings are growing and business profitable. Therefore they prepare a load to be sold every week-end at the town where the price is highest. At the moment there is a good price on potatoes and they are motivated to continue planting alternately. This is Eufracina’s 6th loan with MFP and she has been punctual in her payments and she is very grateful to all the people that have supported her with this activity. The loan requested will be invested in buying fertilizers for the farming of potatoes so the production will be good and she will be able to make the weak plants strong.

  

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