Micro Loans Change Lives

Posted

on Oct 28, 2014

Kiva - a non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world.

The speaker on October 28^th was Ron Beaton. He is a retired Dentist and Financial Planner. Ron has been making Kiva Loans for 7 years. He spent four months roaming Indonesian and the Philippines in 2013 as a Kiva Fellow. He is going to Rwanda in November to carry out an audit on a Kiva partner.

How does Kiva work?

Kiva works with existing microfinance institutions, social businesses, schools and non-profits around the world to provide loans to borrowers who don't have access to the traditional banking system. Kiva provides 100% of your loan funds to these microfinance institutions, which we call Field Partners, who administer Kiva loans in the field.

The process starts with our Field Partners, who approve and disburse a microloan to a borrower in need. They take a picture of the borrower, write down the borrower's story and post a loan request on Kiva's website for Kiva lenders to fund.

Lenders browse the loan requests and make a loan using PayPal, their credit card or, if they've received some repayments, Kiva Credit.

Kiva collects all of the loan funds and provides them to our Field Partners. Field Partners typically use the Kiva lender funds to backfill the loan they've already disbursed to the borrower. Disbursals can happen up to 30 days before or 90 days after a loan request is posted on Kiva.

Over time, the borrower repays the loan. Every month our Field Partners let us know who made a repayment (and in what amount), and we provide those repaid funds to Kiva lenders. We give our Field Partners the option to cover borrower defaults and currency losses. Repayment updates are emailed to Kiva lenders.

When lenders get repaid, they can re-lend to another borrower, donate their funds to Kiva's operational expenses, or withdraw their funds to a PayPal account.