A few months ago, I blogged about a loan I helped fund for Sikinanene Sauyi, an entrepreneur in Kenya who used the $450 she borrowed from Kiva to buy some steers to raise.
Many other people contributed to Sikinanene’s loan; she received the funds a few weeks later and used the funds to purchase the steers.
Now, she has paid back the loan in full - $450 in ten months. This is the first loan in my Kiva portfolio to be fully repaid, and now I am loaning the $75 to three other borrowers. For me, this is a gratifying proof that the concept works. I don’t know how much better off Sikinanene is, but I assume the loan made a difference, and I know the money is being used properly and is being paid back.
Kiva continues to expand, and struggles to post enough loan requests to keep up with the funding demand that follows each big media story on their operation. ABC News had a story on Kiva in June, shortly after they started offering loans to Iraqis. Over 1,000 people signed up with Kiva within 24 hours, donating over $100,000:
The first Iraq entrepreneurs to join this lending service went up on the Kiva Web site just two weeks ago. Photographs of their faces were blurred to protect their identities…
“A lot of people had the same reaction I did, which was, ‘This is my chance!’” said Christian Conti of Washington, D.C., who loaned $25 to a mobile phone shop owner in Kirkuk. “As someone who watches the news play out day to day & and all you hear is the negative news & you say, ‘Man, I wish I could do something.’”
…
“Right now the Iraqis are going to quickest. I think they all got funded in half a day, which is the fastest sector on our site right now,” [Kiva spokesperson Matt] Flannery added.Some of the Americans who responded told ABC news the loans were their way of helping with Iraq’s reconstruction, lifting an economy left in tatters by the U.S. invasion.
It’s working - all 411 loans listed in the Middle East region, which includes Iraq and Afghanistan, have been fully funded (if more loans in the Middle East are posted and still in need of funding, they’ll show up here).
Kiva has also managed to do a great job of ensuring people pay back their loans by working closely with local lending agents:
Only one out of 9,000 borrowers has defaulted on a Kiva loan; all others have paid back or started to pay back their lenders. While the individual lenders on Kiva don’t collect interest on their loan, the borrowers do pay interest to Kiva’s field partners at a rate of roughly 13 percent to help cover their operating expenses. That’s usually far less than the interest charged by banks or other institutions that are available to make loans.
Kiva provides people like you and me - people with PayPal accounts and a little cash we can spare - the opportunity to invest in others, making a sustainable difference in their lives. This is not charity; it is microfinance.
