Lending through Kiva
March 30, 2008 8:55 AM Subscribe
Lending through Kiva or other organization?
In trying to do some small part to improve life for others, I'm considering heading into a territory that's new to me: microlending to individuals in developing countries. I've been reading up on Kiva.org, and would really appreciate feedback from anyone here who has made loans through them, or who has found a more effective alternative that they can recommend. I'm a bit hesitant to say this here, but I'm honestly less concerned with surety of repayment than the effectiveness and fairness of the program. If Kiva is the best option, how best to maximize the contribution that I can make (aka avoid predatory interest rates from the local bank)?
In trying to do some small part to improve life for others, I'm considering heading into a territory that's new to me: microlending to individuals in developing countries. I've been reading up on Kiva.org, and would really appreciate feedback from anyone here who has made loans through them, or who has found a more effective alternative that they can recommend. I'm a bit hesitant to say this here, but I'm honestly less concerned with surety of repayment than the effectiveness and fairness of the program. If Kiva is the best option, how best to maximize the contribution that I can make (aka avoid predatory interest rates from the local bank)?
Best answer: I've really enjoyed Kiva and I recommend it. I ended up spreading out the money I was loaning to several people and now I really enjoy when I get an email that one has repaid some money (it's not at all about the repayment, just knowing that they're doing okay).
This blog post mentions some other micro-loan organizations, although I have no experience with them.
posted by sharkfu at 9:36 AM on March 30, 2008
This blog post mentions some other micro-loan organizations, although I have no experience with them.
posted by sharkfu at 9:36 AM on March 30, 2008
Best answer: I've been lending through Kiva for close to a year now, with no problems whatsoever. I've loaned $525, and been repaid over $300.
One thing I would say is to pay attention to the institute in the other country. Kiva has a 5 star rating system, with 5 stars being the best. Lending through one of these organisations is probably your best bet. It might also be worth you reading up on that organisation on the internet. There's also a forum that you might like to check out.
posted by Solomon at 9:42 AM on March 30, 2008
One thing I would say is to pay attention to the institute in the other country. Kiva has a 5 star rating system, with 5 stars being the best. Lending through one of these organisations is probably your best bet. It might also be worth you reading up on that organisation on the internet. There's also a forum that you might like to check out.
posted by Solomon at 9:42 AM on March 30, 2008
Best answer: I lend through KIVA and I'm satisfied that they are the best way for me to make microloans. There are other organizations that do this sort of thing but none with the size and scope of KIVA. I just don't feel I could wade through all the others in order to find something more effective.
KIVA takes no money from your loan and the microfinance institution (MFI) that lends it out charges prevailing interest rates. The (MFI) makes profit only from the interest. The (MFI) needs to have a minimum of 1,000 active microfinance borrowers, a history going back more than 24 months, be legally registered in it's country, and have a least one full year of audits. (MFI)'s preferably, should also be tracked on Mix Market
Volunteers called Kiva Fellows work with the (MFI) to post updates to keep you apprised of what is happening to the people and business you have loaned money to.
Start with Risk and Due Diligence and that may answer more of your question.
posted by arse_hat at 9:51 AM on March 30, 2008
KIVA takes no money from your loan and the microfinance institution (MFI) that lends it out charges prevailing interest rates. The (MFI) makes profit only from the interest. The (MFI) needs to have a minimum of 1,000 active microfinance borrowers, a history going back more than 24 months, be legally registered in it's country, and have a least one full year of audits. (MFI)'s preferably, should also be tracked on Mix Market
Volunteers called Kiva Fellows work with the (MFI) to post updates to keep you apprised of what is happening to the people and business you have loaned money to.
Start with Risk and Due Diligence and that may answer more of your question.
posted by arse_hat at 9:51 AM on March 30, 2008
I too lend with Kiva, and have nothing really else to add to the above posts. I've been very happy with them.
posted by gaspode at 10:01 AM on March 30, 2008
posted by gaspode at 10:01 AM on March 30, 2008
Response by poster: Thank you all for your feedback. I've taken the plunge and made my very first micro-micro-loan. I'm still open to learning more about how to make this as effective as possible, so please keep information coming!
posted by vers at 11:01 AM on March 30, 2008
posted by vers at 11:01 AM on March 30, 2008
I lend tiny little bits with Kiva, and have had only good experiences.
posted by arcticwoman at 11:09 AM on March 30, 2008
posted by arcticwoman at 11:09 AM on March 30, 2008
On a borrower page of the Kiva site, click the name of the field lender to learn more about them, incl a comparison of their rates and the local rate. I'm a happy Kiva lender and find that the small loan amts make it easy to donate a portion of each paycheck.
posted by PatoPata at 12:32 PM on March 30, 2008
posted by PatoPata at 12:32 PM on March 30, 2008
i've been lending to kiva for three years. i think it's great.
posted by thinkingwoman at 12:52 PM on March 30, 2008
posted by thinkingwoman at 12:52 PM on March 30, 2008
Kiva is a great way to do something positive with (comparatively) small amounts of money. The best thing is getting periodic updates on how your borrowers are doing. So far, I have had only great experience, and all my loans have been paid back on time or ahead of schedule.
posted by mmf at 8:14 PM on March 30, 2008
posted by mmf at 8:14 PM on March 30, 2008
This thread is closed to new comments.
The one problem I've heard of with microloans is that people are getting them, and they're so destitute that they use the money to feed their family rather than starting a business... So it really comes down to who's out there on the ground managing local interaction. (I'm unable to comment on how Kiva compares to others, sadly.)
posted by fogster at 9:25 AM on March 30, 2008