Five Reasons To Use Kiva

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Five Reasons To Use Kiva

At SALT we are giant fans of Kiva, the international micro-lending platform established by Jessica Jackley and Matt Flannery in 2005. We think you should be too. Have a look at the Kiva website (www.kiva.org) to see how your money can quite literally change peoples lives, and have a look through our top five reasons we’re so excited about what they do.

Duration : 2 min to read

The Grameen Bank Structure

Muhammad Yunus’ Grameen Bank, established in 1983, has assisted 75% of his borrowers to cross the poverty line, and is the foundation for Kiva. Grameen offers small loans to the poorest citizens of Bangladesh and its model has been copied throughout the world. It was Yunus himself who inspired Jackley and Flannery to establish a similar platform that would link lenders and borrowers who otherwise would never communicate.

Loans, Not Donations

Providing finance for small businesses by way of lending money is a brilliant way of helping an individual or family move to the next stage of their careers. Often the requested amounts are small in comparison to how much a parallel progression in a Western business might cost, and if you need further reasons to help a person progress in their business, one comes ready made for you – your donation is a loan, and will be paid back over time.

Specifications

Having a say in exactly where your money goes and who it ends up helping is one of the greatest components of Kiva, who categorise the prospective borrowers so that lenders can support women, or food, or sustainable projects, depending on where their interests lie. Specificity in investment is helpful for multiple reasons – you may find a borrower achieving something close to your own heart and be able to assist them in their progress with it.

Field Partners

Kiva work with field partners who are present on the ground in the areas in which the borrowers live and work. In this way the model is built on genuine relationships between people rather than long distance communications or bureaucracy, which helps to keep everyone best informed of any developments, and ensures that needs are being genuinely met.

Putting An End To The Poor’s History Of Exclusion

Across the entire world the least wealthy individuals are maligned and excluded, denied opportunities even to fend for themselves or to make their way out of poverty and its harrowing conditions. Kiva, Grameen Bank, and similar projects are striking at the very heart of this inequality, empowering the voiceless to establish their own businesses, achieve new qualifications, and expand their knowledge, whilst enabling the individuals to control the system through which their financing comes. The borrowers propose their own repayment schemes and Kiva profiles, and so remain the focal point of the platform.

Kiva is a strong and unpatronising platform through which everyday people can empower other everyday people. It is this simple, progressive system that has so far donated $656,467,925 to businesses worldwide and changed 1,518,230 people’s lives – so far.


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PHOTO CREDITS: Hibr on flickr
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1 COMMENT

  1. For “giant fans” of Kiva, could you explain a number of points? First, leading academics have struggled to find any impact of microfinance alleviating poverty. A recent paper summarises 7 random controlled trials. And yet you boldly claim Kiva has changed 1.5m lives. Do you find it a little strange that Kiva do not publish the interest rates on their loans? We hear much of exploitative interest rates in microfinance, and I wonder if you have much faith in interest rates costing over 100% – isn’t it a bit strange that Kiva don’t (or can’t) even publish the interest rates the poor pay? Also, isn’t it unusual that the repayment rates on Kiva are higher than the underlying banks themselves? How do you explain that? You suggest that Kiva enables people to chose who they lend to – again, this is not strictly true, the loans were disbursed previously by the banks, the clients already have the money, the Kiva users simply “buy” these loans from the banks. You suggest that loans are used to fund businesses, but on what evidence do you state this? Most microfinance is not used for businesses whatsoever, but used for consumption (see academic papers). The questions continue.

    This article is a typical, cliche account of the romaticized view of microfinance, pushing all the right buttons to convince a naive Western audience. I assume this is due to the brevity of the due diligence process – or do you actually believe this rhetoric? In actual fact there are many viable alternatives to Kiva that are worth considering and have substantially more impact on poverty. However, what intrigues me most is that you have become “giant fans” on what basis? To what extent is this evidence based rather than ideological?

    http://www.povertyactionlab.org/publication/where-credit-is-due

    http://blog.microfinancetransparency.com/microfinance-reality-check/

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