Kiva: Financing Hope

Kiva: Financing Hope

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Poverty’s an uncomfortable word. It conjures images of suffering, helplessness and deprivation. And when 70% of the world’s poor are women, they bear the brunt of limited access to basic rights like food, education, healthcare, and HIV prevention.

It’s women who tend to have lesser skills, employment options and, most of all, access to finance. This keeps women in a poverty trap that’s very difficult to escape. And the effects ripple through the family and community.
Enter Jessica Jackley, co-founder of microcredit organisation, Kiva.

Repositioning poverty as a side-note in the stories of strong, smart, hardworking entrepreneurs trying to make their tomorrows better, Kiva offers microloans to third-world entrepreneurs in a way that validates dignity, opens dialogue, and fosters optimistic partnerships.

An old idea in new hands

Inspired by Nobel laureate Dr Muhammad Yunus, pioneer of microfinance and founder of Grameen Bank in Bangladesh in the 70s, and witnessing the life-changing impact a $100 loan could make to the lives of poor entrepreneurs, Jackley realised many entrepreneurs didn’t want donations, they wanted meaningful relationships and support as well as capital in order to do more of what they were already doing.

Moving forward, Jackley and her partner set up a website showcasing the stories of business and hope of a group of entrepreneurs and their need for a loan. Initially motivating friends and family to become lenders in $25 bits, Kiva soon scaled up, tapping into the $130 million per year lent by friends and family to start-ups in the US.

In its first year in 2005, Kiva facilitated $500 000 worth of loans. To date, $329 million has been loaned from users across 220 countries.

 

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The model

Using a social business model, Kiva is a non-profit organisation leveraging the Internet, crowd-funding, and microfinance institutions worldwide. It’s able to lend individuals as little as $25 on terms they can live up to. Kiva’s field partners then facilitate loans with women previously ignored by lenders, and give them the opportunity to break the cycle of poverty.

Unlike once-off donations, lenders are repaid their initial loan when the entrepreneur is able to do so. Kiva then offers lenders the option to be paid out or reinvest their sum.

Changing the story

“Imagine how you feel when you see somebody on the street who is begging,” says Jackley. “Then imagine the difference you might feel seeing someone who is smiling and has a story of hope and entrepreneurship, who says ‘look at the business I built, I can now send my children to school’.”

By showing someone who is creating and has something to offer, and by providing the small capital required, these stories can change the future for millions of women.

By the numbers

  • 815 000 : Borrowers who have received loans through Kiva since 2005
  • 82% The percentage of Kiva borrowers who are women
  • $329m: Loans facilitated by Kiva since 2005
  • $400: Average loan request
  • 98,98%: Loan repayment rate

Visit www.kiva.org

Tracy Lee Nicol
Tracy-Lee Nicol is an experienced business writer and magazine editor. She was awarded a Masters degree with distinction from Rhodes university in 2010, and in the time since has honed her business acumen and writing skills profiling some of South Africa's most successful entrepreneurs, CEOs, franchisees and franchisors.Find her on Google+.