Has anyone used Kiva to provide microloans?

[snowcat]

I am considering donating some money for micro lending as part of our family Christmas giving this year. One way to do this is through a non-profit called KIVA. The concept is pretty cool. You put money in your account and then select which loans you would like to help fund (currently over 4000 loans available). When you are eventually paid back (without interest), you can choose to fund additional loans or to receive your money back. I think it would be very fun for the kids to help select the portfolio of loans we would fund from across the world and then see the repayment get reinvested.

Does anyone have any experience with this organization?

http://www.kiva.org/

We are a non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world. Learn more about how it works.


Since Kiva was founded in 2005:
639,886 Kiva lenders
$257 million in loans
98.93% Repayment rate


We work with:
146 Field Partners
450 volunteers around the world
61 different countries

[Solon]

I am considering donating some money for micro lending as part of our family Christmas giving this year. One way to do this is through a non-profit called KIVA. The concept is pretty cool. You put money in your account and then select which loans you would like to help fund (currently over 4000 loans available). When you are eventually paid back (without interest), you can choose to fund additional loans or to receive your money back. I think it would be very fun for the kids to help select the portfolio of loans we would fund from across the world and then see the repayment get reinvested.

Does anyone have any experience with this organization?

http://www.kiva.org/

When my sister's baby was born, we set up a kiva account in the baby's name (for like $35 dollars or something). I'm not sure if my sister is using it, but they're a legit organization and (I hope) doing some good in the world. I knew several people who have accounts when I was in grad. school.

It's a good Christmas present. Better, at least, than Costanza's "The Human Fund."

[Katy Lied]

For a differing opinion of microloans:

A summary of why they don't work: http://money.howstuffworks.com/microlending4.htm

Where they fall short: http://www.newyorker.com/talk/financ...alk_surowiecki

I have talked to entrepreneurs in a 3rd world country, and they say that they wont take microloans because the interest rate is too high at 30%. Or they take it and never can repay it because the rate is too high.

I dont know about specific programs that are interest-free. If the money distribution system works, that's good, but it seems to me that even interest free money gets a lot of fees and bribes tacked on along the way.

[snowcat]

For a differing opinion of microloans:

A summary of why they don't work: http://money.howstuffworks.com/microlending4.htm

Where they fall short: http://www.newyorker.com/talk/financ...alk_surowiecki

I have talked to entrepreneurs in a 3rd world country, and they say that they wont take microloans because the interest rate is too high at 30%. Or they take it and never can repay it because the rate is too high.

I dont know about specific programs that are interest-free. If the money distribution system works, that's good, but it seems to me that even interest free money gets a lot of fees and bribes tacked on along the way.

Thanks for posting these. The New Yorker article basically says that there are still pieces missing in this puzzle. I remember watching and interview with Muhammad Yunus where he mentioned that in developing countries the the economic ladder ony had a few rungs and that they were at the very top. His goal with micro lending was to get a rung as close to the bottom of the ladder as possible. That still leaves a lot of missing rungs in between.

Kiva itself does not charge any interest on the capital it provides. THere is some cost to the lender imposed by doing business with Kiza due to the cost of posting information on the specific loans.

Kiva discloses quite a bit of information about the various lending partners they fund and rate them accordingly. It seems that the rating is based mostly on the repayment risk and not as much as on the success or good that a lender can do. Each loan does show considerable information about the lending institution including the lending partner's portfolio yield which could be somewhat a measure of the relative interest being charged. Some of these appear to be fairly high, but my understanding is that it is still significantly cheaper than alternatives to those who are taking the loans.

So the question is are we helping these people by providing a this source of capital or is it doing harm?