Organization Spotlight ~ Kiva – Lending Money to Create Opportunity
Graciela is a 28-year-old mother of a 10-month-old baby. She and her husband, along with their baby, reside in a densely populated region of Ecuador. Graciela’s husband is a professor of Theater Arts. In order to enable her to be able to contribute financially to her home Graciela sells shoes door to door, something she has been doing for a “few years”, working an average of eight hours a day.
Graciela describes her days as exhausting given the “long stretches” she must cover and due to the lack of support and loans from financial institutions in her region – starting up her business has been challenging. Her dream is to “grow and have her own shoe store”, which will allow for her family to live better overall, including worrying less about her child, who is at risk for lacking necessities.
Graciela is simply trying to survive, and although we may feel helpless in these situations, there is in fact something we could do to help.
Kiva is a non-profit organization fueled by a mission in which they seek to end poverty by lending. “Kiva lets individuals lend as little as $25 to help create opportunity around the world.” Funds are lent in order to meet various needs of borrowers including clothing, transportation, agriculture and housing. Graciela is one of the many faces on the Kiva website seeking this loan.
Essentially the way Kiva operates is a borrower meets with a “field partner” to request a loan, in some instances the funds are dispersed and the loan is then reviewed and published on Kiva.org. The rationale behind initial disbursement of funds is due to the fact that for many borrowers, a delay in funds can negatively impact their business.
For the “life of the loan” borrowers are able to see progress updates both via email and the Kiva website, and as the money is repaid by the borrower, it becomes available in the lender’s account. At that point lenders have the opportunity to use it to fund another loan, donate to Kiva, or withdraw it and use it elsewhere.
To date 708,741 entrepreneurs have received a loan through Kiva and the current repayment rate is 98.90% and the average loan amount is approximately $386.14.
This structure of Kiva is based on what is called Microfinance. A concept which reminds me of the Chinese Proverb: “Give a man a fish and he will eat for a day. Teach a man to fish and he will eat for the rest of his life.”
Many of the recipients of these loans have been “taught how to fish” or in many cases have taught themselves “how to fish.” Many of these men and women are trying to sustain their business and aren’t asking for a gift or a handout but rather, they are asking for an opportunity and are willing to work to pay back the money borrowed to their lenders, people, and corporations who were willing to invest in the life of another human being.