Kiva: the world’s first person-to-person micro-lending website

Kiva

Kiva

Today is Blog Action Day:

I would like to use that as a chance to talk about Kiva, a website that facilitates micro-lending: allowing people to give small personal loans to entrepreneurs in developing countries.

It is a great example of how the Internet can make things possible that weren’t possible before. It builds bridges and connections that just wouldn’t happen earlier. Kiva allows us to see which entrepreneurs need small loans (often only a couple of hundred dollars). We can then decide who we will lend our money to and can use Paypal to do the transaction. Kiva’s field partners are responsible for making sure that the money reaches the right person and will also make sure that the entrepreneurs pay back their loans. The field partner also gives updates to the lenders about the repayment (through email and RSS).

You are encouraged to give many small loans instead of a few big loans. This way you spread the risk , which isn’t high anyway with a 1.3% default rate on more than 15 million dollars in loans.

A couple of months ago I lend out $ 25.00 to Vuth Ang who used that money (and the money from others) to buy a new grinding mill:

Vuth Ang, a Kiva lender

Vuth Ang, a Kiva lender

She has been pleased with the results of her investment. So far, the grinding mill can earn up to $5 each day. In the future, this couple plan to purchase a truck to transfer wood, rice and etc… There are no problems paying back the loan. Again, she states that the loan is very useful as it is provide a chance to all poor entrepreneurs to start and sustain their businesses. Finally, she would like to say thanks to all lenders for interest helping Cambodian entrepreneurs like her family.

I have decided to make out another loan today. Why don’t you do the same?

(Kiva Brochure)