Summary: Use Kiva to connect with entrepreneurs around the world, through microfinancing, and change lives with a $25 loan.
Kiva is a fairly new kind of microfinancing venture that empowers people around the world to change lives with a $25 loan. Since starting in 2005, their goal has been to connect people all around the globe with the funds they need to bring their business ideas to life. Kiva is made up of volunteers, field partners and employees who believe in providing affordable access to capital to anyone who needs it.
They have successfully funded $580,581,850 in loans to small business owners in 77 countries, and currently have a 98.86% repayment rate.
What is Kiva?
Kiva is a person-to-person microfinancing website that enables individuals to lend directly to other entrepreneurs anywhere in the world.
Microfinance is a type of financial lending service that provides low-income individuals with the money they wouldn’t otherwise have access to. Much like with crowdfunding. microfinancing takes the power of multiple individuals lending a small amount of money and adds it up to fully fund the loan.
Some studies have even shown that microfinancing can play a big role in the battle against global poverty.
How Does Kiva Work?
Every dollar you lend on Kiva goes directly towards funding loans. Although it works as a lending program, it’s based more on the donation system where you, as an individual, investor, or do-gooder, donate $25 to a cause or other individual that catches your eye.
Kiva doesn’t charge their field partners interest — who administer the loans in developing countries — and they don’t take a cut of the funds for themselves. (Although, you can choose to donate some extra funds to Kiva directly, when processing your loan.)
Additionally, they raise funds through grants, corporate sponsors, and foundations to keep the organization operating.
1. Loan money on Kiva. You start by clicking the “Lend” button, which takes you to a section of the site where you can choose a borrower to fund. The maximum amount of money you can lend to any one borrower is $25 so there is minimal risk.
2. Stay updated. After you have chosen a borrower and added funds via Paypal, you’ll start receiving
regular updates on whether or not your loan has been paid back. If you choose to lend money to someone whose loan isn’t fully funded yet, you’ll receive an update when that has been fulfilled and the lending process takes place.
3. Get paid back and repeat. As the borrower repays the loan, in coordination with the field partners, your account will be credited. You can then choose to re-lend the funds to another person/project or withdraw the funds to a bank account.
Do You Make Money With Kiva?
Simply put, no, you don’t earn money or interest lending with Kiva. However, you’re supporting a cause that’s greater than just you, and are able to diversify your investment portfolio with a little bit of “good karma”. Most of the funds you lend to other business owners will be paid back into your Kiva account, giving you the chance to re-lend the money to another entrepreneur across the world.
As a young entrepreneur myself, I like to see my money going towards other great causes, even if I don’t earn any money in return. There will always be plenty of money to invest in the stock market. mutual funds and the like, but sometimes it’s nice to see the money going straight to someone who really needs it.
You can also team up with other individuals, groups and organizations to collectively fund certain projects. And with the social integration that Kiva’s site offers, you can see which of your friends are lending on Kiva too.
Do Good and Invest with Kiva
I personally like to donate to a new cause every few months, when my initial $75 investment has been paid back. Like with any other investment, there is a small amount of risk when lending with Kiva. Although they do have a very high historical repayment rate, your results are not guaranteed.
Investing in other businesses isn’t always about getting the biggest and best return possible. As your personal portfolio prospers you can help other aspiring entrepreneurs live their dreams by contributing to causes like Kiva.
Join me on Kiva and get rewarded! For a limited time right now, Kiva is offering a free $25 bonus to new lenders who sign up through this link .
Category: Payday loans