We all know how a loan works…
You need money, you go to the bank (or to your dad), make your request, and settle for the conditions.
Easy, peasy… for us, anyway.
What happens when its not that easy, and your livelihood, not your credit card payment, depend on it? Well, this is the case for many a person in developing countries.
Kiva, an organization with real, sustainable, entrepreneurial aid at it’s foundation, it making it much easier.
Whats the deal?
Micro loans! People helping people by not making donations, but by temporarily lending some of their excess to a person thousands of miles away for a specific purpose.
How does it work?
- Choose a borrower: from the Kiva database, you can select the person you temporarily fund.
- Make your loan: its as easy as pullin’ out your credit card.
- Get repaid: it’s a loan! There are different time periods, depending on different amounts, but it comes back.
So what’s so great about it?
- There are local partners in the areas where the money is loaned to, to ensure responsible practices and legitimacy
- You can either be payed back, or refund the money once it’s been payed back to the org
- It encourages entrepreneurship! The people requesting these loans are contributing ten-fold to their society. The purpose of their borrowing is for sustainable, continuous growth and aid in their communities.
- You can see how you’re loaning to, and for what purpose
- You can see what the social contribution is: anti-poverty, innovation, family and community, etc.
Since Kiva was founded in 2005, there have been over 1,300,000 lenders. Almost $800,000,000 lent, with a repayment rate is 98.48%!
Which is incredible.
Wouldnt you be willing to loan your lawnmower out a little more readily if you know for 98% sure you would get it back? I sure would.