Kiva - Making things slightly less awful, $25 at a time

Hello again! 

I originally posted this on my old Tumblr blog, but neglected to transfer it over. I decided to post it here because I got an email the other day updating me about the loan I made to a Palestinian guy (a picture of him is in the post below). His loan was funded, and he made his first repayment of 70¢. It was a timely reminder of how important the loans can be to people, regardless of the amount borrowed or repaid. 

I'm now on my 17th Kiva loan (which is definitely not that much compared to most people on the site):

As you can see, I haven't invested a great deal (the number above includes promotions where individuals or organisations will effectively match your donation), but it's possible to see already how the cycle of lending and repayments means that your funds have far more impact than a traditional charity donation. 

Again, please get involved! It's fun, personal, and rewarding, and (I feel) immensely worthwhile.

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Kiva is bloody brilliant.

What the hell is Kiva?

Kiva is a fantastic site that facilitates micro-financing to individuals (primarily) in developing countries. I’ve been using it for a couple of years now (after being introduced to the site via my fiancée), though I’ve only recently been taking a more active involvement. I emphatically believe that Kiva is a great service, and I’d love for more people to be involved.

Basically, through the website you find somebody that you’d like to lend to. There’s a name, a picture, and a description of why they need the loan. If you’re interested, you can pitch in $25 (about £16) towards whatever their total is. Once the loan is funded, they start paying back over a pre-decided period of time. Eventually you have your money returned, and you are free to either withdraw it to your PayPal account or reinvest it into another loan. For example, my first loan was to these ladies in Benin:

Why is Kiva better than just donating to charity?

As this excellent article explains, most charitable donations to developing countries often go to projects that are naively ill-conceived, impractical, or often flat-out unwanted.

Now I’ll get to the flaws of Kiva and micro financing later, but first of all it’s worth outlining the major benefits:

• You’re investing with actual individuals or groups on the ground. They know their business, and what will help it grow. You’re dealing with actual, flesh-and-blood people.
• Microfinance allows people access to investment where traditional banks may not be involved due to smaller margins, risk of default, or a number of other reasons.
• You get your money back! Unlike most charitable donations- where you send your money and then never see it again- with Kiva you receive your money back. It’s immensely gratifying to see somebody pay back your loan 100%, and then being able to loan that same money back out to somebody else.

How much choice do I have with Kiva?

Without doubt my favourite aspect of loaning through Kiva is the element of choice. You have an enormous amount of scope as to who you choose to give your money to. For example, when I make loans I prefer to lend to women, as I believe that they often particularly struggle to gain funding from conventional banks.

I choose these loans due to my feminist tendencies, but your own loans can reflect your beliefs, values and interests. As you can see above, you can search for loans by gender, country, sector, partner, and a number of other variables. Now, I’m definitely not somebody who subscribes to the old ‘charity begins at home’ philosophy, but if you do then there are even people looking for Kiva loans in the United States.

So far, I’ve tended to invest in projects where there’s a shorter repayment period. This is largely because I’ve only fairly recently started investing more money, and I want to be able to loan funds back out again as soon as I reach the magic $25 mark. But again, it’s up to you!

Of course, at the heart of Kiva is a desire to positively affect change in the world that we live in. Last year, I was particularly appalled by events in Gaza, as Palestinian civilians were murdered and saw their homes obliterated. There were a number of people in the Western media implying that this was completely deserved, and was the fault of Palestinians themselves. I felt enraged by what was happening (and the indifference of those elsewhere), but also incredibly impotent; after all, what could I do to help? One day, I noticed there were loans to help people rebuild homes destroyed by the IDF.

Now of course my own contribution was infinitesimally inconsequential compared with the scale of the destruction, but it nonetheless felt empowering to be able to do something (however small) to help out somebody who needed it.

Ok, ok, I get it! You can get down from your soapbox now.

Cheers.

I hope I’ve persuaded you of the good that Kiva is doing to help people looking for investment. Now, I’m aware that microfinance isn’t a solution to help everybody. Even though I understand that the high interest rates are necessary, I’m still not entirely comfortable with it. Plus, I’m aware of the potentially neo-imperialist nature of Westerners interfering and trying to ‘liberate’ the developing world with our ill-gotten gains. I get it.

But, I do believe that systems such as Kiva provide a vital way for those in developing countries to develop their own businesses; they know what they’re doing, and provided with capital that is usually denied to them, they can succeed. Selfishly, I’m a huge fan because it allows those who invest to feel closer to others and the world we live in. Our world now is increasingly interconnected, and technology gives us an amazing opportunity to change things for the better.

I’ll probably never visit Burundi, but I get a kick out of knowing that there’s somebody there who is developing their business with a loan that I am a (very small) part of. 

If you’re in any way inclined, give Kiva a try. You won’t regret it!