The steps in detail:
- On Kiva.org you select an entrepreneur. Using your credit card or Paypal Kiva collects the loan and gives it to one of the microfinance partners they work with worldwide
- The microfinance partner ensures that the selected entrepreneur gets the loan. Often this partner also provides training and other assistance to make the chances of success as big as possible.
- The entrepreneur pays the loan back, usually in 6 to 12 months. Moneylenders get email updates.
- When lenders have received their moey, they can loan it to someone else gain, take it back or donate it to Kiva to cover the organisation’s operational costs.
At the moment 441,111 people have lent $59,4 million. With this money 84,958 loans have been given in 44 countries. The nice thing about Kiva is that loans aren’t given solely from rich countries. Nowadays people from Mexico loan to people from Mexico too. And people in India loan to people in Cambodja. Of course Kiva makes its results available online.
As lender you can offer a maximum of €25 per project. This isn’t a risk limitation, but a measure to give as many people as possible the chance to borrow money. Finding suitable projects to finances is currently the limiting factor of the system (explanation).
Future Vision by Erwin Van Lun on this article
Kiva is just a new-style bank. Borrowing/Lending money, saving money, entrepreneurship. It’s all about mutual trust. Later on another social layer will be on top of this: you can build a reputation as an entrepreneur. Have you borrowed successfully before? Are you recommended by others who borrowed successfully before (that’s an indication this person might be trustworthy too), do you come from a family which has successfully started a business? Or has the borrower contacts who’ve borrowed from you before? It all adds up. And they’re undoubtedly the next steps which organizations of Kiva are working on.