For a while now I’ve been putting a little money here and there into Kiva. They’re a non-profit organisation who lend money out to individuals and small co-operatives in many of the poorer regions of the world.
You put some money into your Kiva account and then pick an entrepreneur (or more than one) to lend the money to. The money is disbursed to the businesses via ‘field partners’ – organisations located near the recipients who select the borrowers and manage the repayments. The borrowers pay some interest on their loans, which pays the costs of the field partners. Kiva itself is run by donation. As a lender, you don’t receive interest, but once the loan money is returned to you it can be relent. A charitable donation that keeps on giving!
As well as regular donations to some major charities, I really like the idea of directly helping individuals and their small businesses. Developing businesses and encouraging entrepreneurship seems to me a better idea than just doling out aid money.
If you take a look at my lender page, you’ll see the people I’ve lent money to. Since being a Kiva member, I’ve given out $400 in loans – I put in a much smaller sum, but the money has been cycled round a few times! All of my loans so far have been repaid in full, with no late payments. Pretty good, especially if you compare it to Zopa (where you can earn money by lending to UK-based borrowers) – whilst earning interest here, I’ve had two loans that have defaulted.
This video was produced by a Kiva Fellow – someone who left his job at Credit Suisse in London to volunteer in Cambodia. It gives a great insight into how Kiva works – and might encourage you to lend some yourself!