Monday, August 27, 2007


Thanks to DrowseyMonkey I heard about Kiva.

Young Matt and Jessica Flannery and Premal Shah from San Francisco started this microfinance distribution company, thinking they could use the Internet, as eBay does, to connect people who are impoverished and need funds to get their small businesses going or expanded. The idea is that a 0% / no collateral loan allows more dignity for the recipient and the lender than donations.

Kiva works with microloan partners that help screen qualified borrowers, which number around 15,000 now. Currently the loan repayment rate is 99%. Collections usually happen monthly when the partner visits the entrepeneur. When the lender's (yours) loan is repaid, you can decide to receive it or reinvest it with another entrepeneur. The partners keep journals, which help keep you informed about the entrepeneur's progress.

For example, Malika is a single mother in Tajikistan. She is raising a daughter. Malica, 46, has high school education. Malica sells women’s shoes. Her daughter sells in a small store at the central market, while Malica travels to sell on the markets nearby. Two years ago, when Malica received her first loan to expand her business, she did not own the store. Gradually growing the business, Malica opened the small store. Today, Malica continues to collaborate with MicroInvest. She asks for another loan to continue expansion of her business.

You can donate as little as $25, which goes to an entrepeneur of your choice. Look here to see more of how it works.

If you browse their site, you'll see that they address issues of loan defaults, embezzlement and other risks. Just like any project that involves humans, it isn't 100% perfect. I couldn't find information about how much commission Kiva gets.


Steve Middleton said...

Hi - just passing through
Nice cat you've got there!
I wish I could keep cats but I live in a third floor flat - not fair to the cat!

Steve Middleton said...

Hi Ruth - just visited your photoblog - how great are those pictures!

JoAnn-NL "Through my Dutch eyes" :) said...

Hi Ruth,
What a great story of this thoug mom, but donating we do already,

Nice shots.....

:) JoAnn

DrowseyMonkey said...

Hi Ruth - thanks for visiting my blog and talking about KIVA! It really is a fantastic program.

Love your photo blog too!

Raw Kale said...

I am glad you wrote about this, because it has been something that I am trying to learn about, but all of my research thus far has been extremely dry and I find myself reading paragraphs, and having to go back and reread again and again.

However, I have some thoughts on it, despite my daydreaming. First of all, in Brazil, through microfinancing, a man received the equivalent of $13 USD in Quetzals to buy the land his coffee farm is on- and it took him 10 years to repay!!! Today, he has created a Fair Trade co-op with his neighboring farmer friends (it's the first time they have been able to do this without the government and private interests killing them), and the chap is very excited because he makes 40% more money now. Well, that is a pretty huge percentage increase, unless you're making $10 a year, which according to his repayment plan, it sounds like he is! These people are working 7 days a week, from 5 am to 10 pm.

So, this microfinance system is wonderful- but we have seriously got to cut out these middle men who, even through the Fare Trade, are raping these people of their profits. Who are these middle men? What do they do?

The other beef I have with the microfinancing, is that I see the businesses started fueling the exploitative, globalization process. It's like forced cannibalism. Corporations exploit their resources, leaving them nothing left to survive on, and then they set up storesfronts where now they are selling the very items that caused their own destruction in the first place, fueling the destruction of others.

We've really all got to get on board and start doing something about the corporate bullying that is going on everywhere today. It's far worse-looking that those penis clams, yet we eat it up!

Loring Wirbel said...

Raw Kale, the best source for deciphering all this is the Fall 2005 issue of Cultural Survival magazine, "Fair Trade and Indigenous Peoples". Most of the articles are online at In general, microfinancing and fair-trade support organizations are a vast improvement over standard capitalist mechanisms, but you are right in saying that you must take them with a grain of salt. I had a little bit of that misgiving feeling when Muhammad Yunnus and the Grameen Bank won the Nobel Peace Prize last year -- but only a little bit of misgiving. Not nearly as bad as all the corn-ethanol proponents trying to convince us their technology is green. On balance, it seems that Kiva is still doing something worthy.

Ruth said...

Steve, too bad you can't have a cat. Our Bishop is a wonder - elegant and sweet. We adore her.

Thanks for visiting Flying too. You know how it is to have several blogs yourself.

Take care.

Ruth said...

JoAnn, glad you donate.

Ruth said...

Raw Kale, it's frustrating to realize I might not have enough time to research and know all there is to know about who is legitimate, who is taking more than their share, who is really benefitting from these projects. I hope Kiva and other microfinancers really are helping people live a better life. As you say, many are working harder than I will ever dream of working, with little to show for it sometimes. rauf has told me about organizations that want him to take pictures for them for publicity materials, and they exploit orphans, disabled, etc., using their faces to raise funds when their situation may not be accurately portrayed. No doubt this happens all the time. And you know, where are the investigative journalists nowadays? Very few and far between.

Ruth said...

Loring, don't get me started on corn ethanol. Grr......

Ok, now I've opened, which I didn't know about, thank you very much.

Ruth said...

Here is the fall 2005 issue of Cultural Survival Loring referred to:

Ruth said...

Drowsey Monkey, thanks for visiting Flying too.

I really am indebted to you for the info on Kiva. And now I'm grateful to Loring for the Cultural Survival site, especially the issue on fair trade. It seems like a really good source of objective investigative research.

Ginnie said...

So much to digest, Ruth! The eternal question about how to be a responsible citizen of the world!

Ruth said...

I know, Ginnie/Boots. Sometimes it's hard to find a way through it.

sex said...