Kiva

Bandelier Kiva

Kiva

GreatKiva

Grand kiva at Aztek

Aztec Ruins National Monument Great Kiva

Puerco Pueblo kiva, Petrified Forest National Park

Kiva is an international nonprofit organization, founded in 2005, with a mission to expand financial inclusion by enabling people to lend money via the Internet to low-income entrepreneurs and students in over 80 countries. Kiva's aim is to alleviate poverty by allowing people to lend money to small business owners in developing countries and students in need of tuition assistance, thereby providing them with the opportunity to create a sustainable livelihood.

History

Kiva was founded by Matt Flannery and Jessica Jackley after being inspired by a lecture given by Muhammad Yunus, a Bangladeshi economist who was awarded the Nobel Peace Prize for founding the Grameen Bank and pioneering the concepts of microcredit and microfinance. The couple was moved by the idea of microcredit and its potential to improve the lives of the underprivileged by providing them with loan opportunities to start or expand small businesses. They launched Kiva in October 2005 as a platform to connect lenders with borrowers around the world, making it possible for individuals to lend as little as $25 to help create opportunity around the globe.

How Kiva Works

Kiva operates on a peer-to-peer lending model. The process begins when a borrower applies for a loan through one of Kiva's field partners, which include microfinance institutions, social businesses, schools, and non-profit organizations. These field partners vet borrowers, administer the loans, and handle the repayment process. Once approved, the loans are posted on Kiva's website, where individuals can browse and choose to lend to borrowers. Lenders can lend as little as $25, and when the loan is fully funded, the funds are transferred to the field partner, who then disburses the loan to the borrower. As the borrower repays the loan, the money is returned to the lenders, who can then choose to withdraw their funds, donate them to Kiva, or re-lend to another borrower.

Impact

Since its inception, Kiva has facilitated over $1 billion in loans to millions of borrowers. The organization boasts a repayment rate of over 96%, a testament to the reliability of borrowers and the effectiveness of the field partners in managing loans. Kiva's impact extends beyond financial transactions; it fosters international connections and cultural understanding by allowing lenders to directly support individuals across the globe. Moreover, Kiva's focus on funding underserved populations, including women and people in rural areas, helps to promote economic empowerment and equality.

Criticism and Challenges

Despite its success, Kiva has faced criticism and challenges. Some critics argue that the interest rates charged by some of Kiva's field partners are too high. Others question the overall impact of microloans on poverty reduction. Additionally, Kiva has had to navigate the complexities of international finance and regulation, ensuring that it operates in compliance with laws in the countries where it operates.

Future Directions

Kiva continues to innovate in the field of microfinance and financial inclusion. The organization is exploring new ways to expand its services, including providing loans for education, clean energy, and health care. Kiva is also leveraging technology to improve the efficiency and reach of its operations, such as using blockchain to facilitate faster, more secure transactions.

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