Lending to businesses in the developing world - KIVA

KIVA is fantastic organisation that utilises the power of the Internet to enable individuals to loan to small businesses in the developing world. Through KIVA you are not giving money but loaning it using the principles of microfinancing, with loans being administered and managed locally by microfinancing organisations that are partnered with KIVA. Their website www.kiva.org describes exactly how the loan process works and what KIVAs role is in that process.

There are several things that I like about the KIVA model:

1. When choosing a business that you want to loan to you can see who represents the business and read a bit about them and what their plans for the money are. It adds a very personal dimension knowing exactly who you are lending to, as well as a high level of personal choice because it is you who is deciding what you want to support.

2. Business journals keep you up to date and give you a sense that you are actually making a difference. Some journals are updated more than others but they are great for keeping you informed about progress.

3. Lending to businesses is helping to build the community and often there are unforseen benefits that become apparent as businesses develop. One of the businesses that I lent to was Raising Chickens in Mozambique where the growth of the business has lead to a source of meat protein being easily available to the local community.

I found out about KIVA at the beginning of 2007 and I am pleased to say that all of my 4 loans now have over 50% repaid, with one of them Good Sheperd Enterprises about to reach 100%.

There are very many benefits of microfinancing and KIVA has successfully made it possible for us to make a direct impact on the lives of many people in the developing world.