As readers of the Growthink blog know, I LOVE Kiva (Please read my past blog post on it here). For those not familiar with it, Kiva is a person-to-person micro-lending site –allowing individuals, primarily from developed countries, to lenddirectly to entrepreneurs in the developing world. The borrowers arein places like Cambodia, Bolivia, Azerbaijan, Lebanon, Peru, andTanzania – and primarily borrow to allow their very small businesses toexpand and hire.
Kiva was created in 2005 and originally funded 7 loans for a total of$3,500 which were all paid in full.
Since then, it has grown incredibly. Try these stats on for size:
- Total value of all loans made via Kiva: $89.7 million
- Number of entrepreneurs that have received loans: 217,428 (!)
- Current repayment rate: 98.35% (Phew - how would U.S. mortgage lenders love to be able to say that)
- Number of countries represented by Kiva lenders: 181 (Who says the world isn't a more inter-connected and better place because of the Internet and technology?)
- Percentage of Kiva loans which have been made to women entrepreneurs: 82.88% (A lot of academics and political scientists now cite the very high correlation between women's economic advancement and entrepreneurial opportunities and the relative stability of a country and a culture).
Growthink's first Kiva loan (first of many we hope), was made to Ms. Tamalii Iopu, owner of a fishing business in Luatuanuu, Somoa. Ms. Iopu, a single mother of two, borrowed money last year to buy new fishing gear, and repaid it in full last month.
I would like to say that we had a particularly scientifically methodology for selecting Ms. Iopu from among the literally THOUSANDS of very deserving entrepreneurs on Kiva. The reality is, like most Kiva lenders, we simply connected to her story as presented on the site. And the very pure repayment histories of all of the borrowers is beyond inspiring.
Growthink hopes to do a LOT more with Kiva in the months and years to come. As I noted in my previous post, we love it because:
- Loans, as opposed to charity, promote dignity, accountability and transparency.
- The “middlemen” are cut out. And, phew, is it about time. Kiva is a great example of what the new world of finance will look like in the coming years. As opposed to big, fat, amorphous Wall Street bankers standing between borrowers and lenders, buyers and sellers of money connect directly via a transparent Internet platform. This greatly reduces the cost of capital and allocates it to where the marketplace, as opposed to your politician or your good old neighborhood’s old boys network, determines where it is best served. It is a wake-up call for America. 98% repayment rate! From the poorest of the poor? The titans of American finance (and the American consumer) could learn a thing or two from the Kiva borrowers.
- It is more proof, if proof is needed, of the core advantages of small versus big and of owner-operators versus a managerial class
Check out Kiva at http://www.kiva.org. And prepare to be inspired.