Kiva ushers in a new age of charity
There’s a new face on the horizon for financial contributions toward assisting developing countries and promoting poverty alleviation. It’s name: Kiva.
The web-and-field-based organization, founded only two years ago, has been getting plenty of attention from the media as of late, especially since former president Bill Clinton jumped on the support bandwagon. Clinton even mentioned the organization in his latest book, “Giving: How Each of Us Can Change the World.”
Kiva was founded on the principle of microfinance and social networking. The website, kiva.org, allows ordinary individuals to partner with entrepreneurs in developing nations. The catch is this: instead of merely handing over the money to those who request the aid, it is loaned out to individuals who desire it for a specific purpose and for a specified amount of time.
Once the specified time period is complete, usually somewhere between two and six months, field partners working with Kiva collect the money owed by the entrepreneur, and the funds are disbursed to whoever loaned them. Kiva reports that 99.7 percent of all loans placed are repaid, an extraordinary figure for the work being performed.
Working through an organization like Kiva allows for regular individuals to help alleviate poverty in a way that many people might find a bit asinine. Loaning hundreds of dollars to a small business owner in a developing nation with little hope of any return of the money can seem farfetched, but according to Kiva, it works.
Small business owners in developing countries are doing what they know best and what works for them, whether it be selling bread, weaving baskets, growing crops commercially, or tailoring clothing.
These entrepreneurs already have some sort of business established, but need aid in order to jump-start or revitalize their business. Through Kiva, they can place an offer for a loan, specify the amount of time in which they will repay the loan, obtain the money through donors, use it as they see fit, then repay the money.
The idea behind Kiva is beneficial in more ways than one. The local economy of the region is revitalized, and business owners are allowed to continue providing their goods to their community. Business owners in developing nations are not merely given a check, but are held accountable for the loan. It strengthens their overall business and prepares the borrowers to, essentially, fend for themselves.
A recent article from the Wall Street Journal said, “Microfinance builds on the principal that teaching a man to fish is infinitely better than simply giving him fish. Recipients ‘already know how to fish, they just need a loan so they can buy a net,’ said Fiona Ramsey, spokeswoman for microloan facilitator Kiva.”
Also, a large percentage of those from developing nations requesting loans are women, who would, in many cases, fail to start a business or continue it in what are frequently societies where men are the primary breadwinners.
The connection is easy. Virtually anyone can go to Kiva.org, browse the site for a project that suits the loaner’s fancy, and donate as little as $25 to the project. Once the money has been repaid, the loaner may either keep their original money, or reloan it to other individuals. For those who may be skeptical of giving to charitable organizations, Kiva provides a proven system to not only assist in alleviating poverty, but also help developing nations and the entrepreneurs living in them to genuinely help themselves.
Jaime is a senior studying biochemistry and molecular biology.