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Kiva
A US-based NPO proves that $25 can change the world
If ever there was an organization that demonstrated the old adage “Every little bit counts,” Kiva is it. With an investment of $25, anyone with a credit card and an internet connection can provide capital to entrepreneurs in the developing world through a fast-growing model of philanthropy called microfinance.
Microfinance is the practice of supplying small loans and other banking services to poor or low-income people. Groups called microfinance institutions (MFIs) work with sectors of the population that have traditionally been denied access to financial services. Many MFIs rely on communities to evaluate creditworthiness: if someone is deemed responsible by the community, that is their collateral; if a person defaults on their loan, the community as a whole is penalized by a loss of credibility. Though this might seem like flimsy criteria for the extension of credit, consider that Kiva’s partner MFIs have a default rate of only about 2 percent, while the Small Business Administration in the US recently reported a rate of almost 12 percent.
Kiva—the name comes from the Swahili word for “unity”—is not an MFI itself, but rather a platform that allows entrepreneurs and lenders to connect and distribute funds through local MFIs. The group was founded in 2005 by Americans Matt and Jessica Flannery, who were inspired during a trip to East Africa. The pair met up with enterprising locals who had used grants of as little as $100 to start small businesses that were able to support their families. The Flannerys realized that people back home might be willing to help entrepreneurs in the developing world if they could hear their personal stories—and that modern communication could make that possible. In just a few years, Kiva has distributed almost $65 million in microloans, for an average amount of just $424.54.
The process of using Kiva will be familiar to anyone who has ever shopped online. Lenders can browse the profiles of loan-seekers, including information such as location, gender, personal situation and business plan, to decide who they’d like to give their money to. This level of choice gives peace of mind about how loans will be used, as well as providing a strong personal connection to the recipient, something that is reinforced by the updates and photos posted on the Kiva website.
With individual lenders supplying a minimum of $25, Kiva cobbles enough money together to meet the amount in the loan request (typically $150-$1,500), then sends the cash to a partner MFI in the recipient’s area. The MFI oversees the repayment of the loan, and Kiva distributes it proportionally to the lenders involved, who are then free to use that credit towards other loans.
Kiva takes microfinancing a step further by allowing lenders to band together to form teams. Perhaps not surprisingly, a local group consisting of Japanese and expats has been doing rather well. Team Japan, started by Leslie Nielsen, an American living in Yokosuka, is currently ranked 27 out of Kiva’s 5,588 teams.
Even Nielsen didn’t anticipate how successful her group would be. “I do want to spread the word about Kiva here in Japan and thought starting a team might be a fun way of getting a little energy flowing,” she says. “I figured a few people would join and make a few loans, we would communicate a little about Kiva and the world situation, and that would be it.” However, in the eight months since the team began, it’s racked up just over 250 members and made over $30,000 in loans.
Of course, the group’s contribution is only a fraction of the money that Kiva has enabled lenders to give. But the NPO is proving that small amounts can add up to a whole lot more than you would expect.
For more information on Kiva, see www.kiva.org.
| Village Voices |
■ Where in Tokyo can you see a movie, get a drink, and enjoy good conversation—all for ¥1,000? Well, if you’re on the left side of the political spectrum, at the Democrats Abroad Japan monthly movie night. May’s film will be Michael Moore’s Sicko, and after the screening, DAJ will host a discussion and collect stories for their Health Care Project, which is documenting Americans’ experiences with the medical systems in Japan and the US. The entrance fee includes one drink and a donation to DAJ.
May 18, 7pm. Fujimamas, 6-3-2 Jingumae, Shibuya-ku. Nearest stn: Meiji-Jingumae. See www.demsjapan.jp for more details.
■ If talking politics and health care makes your blood pressure rise, maybe you should relax with some classical music. The
British Embassy Choir will be commemorating the 200th anniversary of both the death of Haydn and birth of Mendelssohn by performing works by the two masters at the Meiji Gakuin University Chapel in Shirokane. Since the choir is entirely self-funded, entrance is free, but donations will be accepted for a local charity of your choice.
May 30, 6pm. 1-2-37 Shirokanedai, Minato-ku. Nearest stn: Shirokanedai. See www.bec.ac/index.html for more details. JO |
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