Site   Web

August 10, 2007 Solving Global Problems One Click at a Time

Unlike most charitable organizations doesn’t give away anything to anyone. They exist to create connections between entrepreneurs in impoverished countries and people in the developed world who are willing to lend them money to expand their operations. This is a revolution in lending. No longer is the micro-lending process tied up in bureaucracy (i.e. the United Nations). Kiva makes it simple. If you are willing to lend Kiva has an established way to administer the distribution of your funds to credit worthy borrowers in many impoverished countries all over the world. This isn’t some internet scam… has received positive media coverage from the WSJ and NPR as well as BusinessWeek.

There are various estimates of the size and growth potential of the microfinance industry worldwide. Unfortunately, the demand for micro-credit services among the world’s poorest is still largely unmet. Agencies spend between $800 million-$1 billion per year, but they only manage to reach between 13 and 16 million impoverished people. This represents only 4-10% of the world’s poor. The microfinance industry has grown 25-30% annually over the past five years, and is expected to show continual growth. But, there is a lack of capital available to microfinance institutions. This represents a great opportunity for Western societies to redirect capital for distribution as micro-loans, many of which are repaid at rates of 95% or higher.

What is unique about the story is that Kiva is the first micro-lending Web site designed to connect people with people. Founded in 2004 by Matthew and Jessica Flannery, Kiva’s goal is to reduce poverty in developing countries by giving entrepreneurs the ability to build their businesses through flexible loans with six-to 12-month terms. Kiva allows individuals to act as a “micro VC” by loaning directly to entrepreneurs with feasible business plans. In other words, they have democratized the lending process. They are looking into expanding into the US market but, as I understand it, there are legal roadblocks to their providing micro-loans in the US at the present time.

Making a loan through Kiva is easy, secure and personal. A potential lender simply goes to, registers in a password-protected section, browses through the business section to review available enterprises in need of funding, learns how much funding the enterprises are requesting, and then chooses one or more businesses to which to loan. Loans are made via PayPal, a globally recognized online payment service. Kiva accepts loans as small as $25 and can integrate funds to customize loan sizes. Lenders can stay abreast of the progress of creditor businesses via a blog-site regularly updated on the Kiva web site. Lenders may correspond with the business owner through a Kiva partner representative in the native country.

If you are wondering how to change the world, gives you a way. Helping people help themselves is a fundamental principle of democratic freedom. What better way to show the world just what we, as Americans, and our capitalist system, is really all about, than by demonstrating it by lending through Kiva. I really believe that has the potential to change the world. Ordinary people helping other ordinary people without the insulation of an entrenched bureaucracy…We no longer need the bureaucrats, the internet provides us with the ability to connect in a way that would have been inconceivable even 5 years ago. People can now unite and work together for real global change without leaving their home office.

The take away from this is: With the power of global communications, and electronic distribution, we can conquer global poverty ourselves, person to person, one click at a time.

Author:  Wayne Silverman lives in Philadelphia with his fiance and a cat named Angela. He works in Public Relations and Advertising for a nationwide franchise company and as a freelance copywriter/editor . He is a popular contributor to several online sites and can be contacted at fractalshift -at-