Sunday, April 26, 2009
I made a Kiva loan today to Saidov Saiburkho. He is in Shahrituz, Tajikistan and needs capital for his carpet store. Wish I could buy a carpet from him! Perhaps some time in the future the kiva loan recipients will be selling online...
Since somebody asked, Kiva is an online company where people can lend (in increments of $25) to individuals in developing countries. These individuals are getting loans through a micro financing institutions, kiva works with these institutes. Micro financing is the concept of lending small amounts of money to people who usually don't have access to credit or financing. A really good book to read on this is 'Banker to the Poor' by Yunnis - the man who won a Noble prize for his microlending concept.
As someone who owns a successful small business I understand how important capital is. A lot of my businesses success has been because I have access to a lot of credit, I have seen other people not be able to succeed because they didn't have good credit (and therefore couldn't even get an account to be able to accept credit cards). My access to credit has allowed me to purchase in bulk and has gotten us through slow times. (In case you're confused - this business is not my main job (I'm a scientist), its a hobby business I own that my friends run, I started it to help friends work from home with their babies, and after 9 years we employed about 15 people part-time last year). Garb the World and Cloth4less.
Anyhow, the point I was making was that business really needs credit to grow, and the micro loans through Kiva are significantly changing a lot of lives. Often more people than the borrower are affected, as the extra monies from business go to educate children, etc.
Kiva allows you to LEND your money to these people, so you can get it back if you want. Most people just keep relending. A lot of my loans are from pay-backs.