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KIVA.ORG
CAPITAL INVESTMENTS THAT GIVE BACK

In a time when the economy is looking so bleak, it's always good news when you hear about the tremendous success story of micro finance business institutions like Kiva.org. They have helped to show the world's leaders that people are still interested in investing in the one commodity that can never depreciate: human beings!

Matt Flannery began developing Kiva in late 2004 as a side-project with while working as a computer programmer at TiVo, Inc. In December 2005 Matt left his job to devote himself to Kiva full-time. As CEO, Matt has led Kiva's growth from a pilot project to an established online service with partnerships across the globe and millions in dollars loaned to low income entrepreneurs. Matt graduated with a BS in Symbolic Systems and a Masters in Analytical Philosophy from Stanford University. You may not hold any school or college certificates to your name, but that doesn't exclude you from making a difference in the world with as little as $5!

So what IS microfinance?
Microfinance is the supply of loans, savings, and other basic financial services to the poor. As the financial services of microfinance usually involve small amounts of money – small loans, small savings etc. – the term "microfinance" helps to differentiate these services from those which formal banks provide.

Why are they small? Someone who doesn't have a lot of money isn't likely to want to take out a $5,000 loan, or be able to open a savings account with an opening balance of $1,000. Hence – "micro".

Why do so many microfinancers target women?
"Microfinance programs have generally targeted poor women. By providing access to financial services only through women—making women responsible for loans, ensuring repayment through women, maintaining savings accounts for women, providing insurance coverage through women—microfinance programs send a strong message to households as well as to communities.

Many qualitative and quantitative studies have documented how access to financial services has improved the status of women within the family and the community. Women have become more assertive and confident. In regions where women's mobility is strictly regulated, women have become more visible and are better able to negotiate the public sphere. Women own assets, including land and housing, and play a stronger role in decision making.

In some programs that have been active over many years, there are even reports of declining levels of violence against women." (CGAP)

Jeffrey Sach's, The Earth Institute at Columbia University's Director says; "My own view is that we have to approach extreme poverty a little like the way in which a doctor might approach a patient. By that I mean do a diagnosis and understand what is it that is really ailing the particular country, the particular region. Sometimes its terrible governance and the question is how to improve the governance and the hope for the kind of change that is needed. In other places it's the terrible burden of disease that may be addressable by good public health measures. In other places it is to show how to grow more food. In other places its how to get business going and microfinance has proven to be an incredibly powerful tool.

Once the basics are in place, the people are eating and can survive, then microfinance can play a huge role in helping a poor community find ways through the market to get new opportunities, to earn new income, to start saving, making investments and start the process of climbing the ladder of economic development in your children, in your business or your farm and continuing up the process of improving skills, specialization, new business ventures and so on. We've learnt that microfinance can be a wonderful tool for that."

Kiva partners with existing expert microfinance institutions.
In doing so, they gain access to outstanding entrepreneurs from impoverished communities world-wide. Kiva's partners are experienced in choosing qualified entrepreneurs. That said, these entrepreneurs are usually short on funds! But Kiva's partners upload their entrepreneur profiles directly to the site so you can lend to them. When you do, not only do you get a unique experience connecting to a specific entrepreneur on the other side of the planet, but all microfinancing partners can do more of what they do, more efficiently.

HOW DOES KIVA WORK? Choose an Entrepreneur, Lend, Get Repaid:
The below diagram shows briefly how money gets from you to a developing-world entrepreneur, and back.

1) Lenders like you browse profiles of entrepreneurs in need, and choose someone to lend to. When they lend, using PayPal or their credit cards, Kiva collects the funds and then passes them along to one of our microfinance partners worldwide.

2) Kiva's microfinance partners distribute the loan funds to the selected entrepreneur. Often, our partners also provide training and other assistance to maximize the entrepreneur's chances of success.

3) Over time, the entrepreneur repays their loan. Repayment and other updates are posted on Kiva and emailed to lenders who wish to receive them.

4) When lenders get their money back, they can re-lend to someone else in need, donate their funds to Kiva (to cover operational expenses), or withdraw their funds..

Interested? Go to www.kiva.org today to learn how YOU can get involved in financing a small business on the other side of the world, all from your living room!