Kiva (http://www.kiva.org/) is a non-profit that allows you to lend as little as $25 to a specific low-income entrepreneur across the globe. You choose who to lend to - whether a baker in Afghanistan, a goat herder in Uganda, a farmer in Peru, a restaurateur in Cambodia, or a tailor in Iraq - and as they repay their loan, you get your money back. It's a powerful and sustainable way to empower someone right now to lift themselves out of poverty.

How Kiva Works

1) It all starts with our Field Partners, which are microfinance institutions operating around the world. Our Field Partners approve and disburse a microloan to an entrepreneur in their community. They take a picture of the entrepreneur and write down the entrepreneur’s story.


2) The Field Partner uploads the entrepreneur’s profile to Kiva’s website. The profile, if it’s not in English, is translated by one of our hundreds of volunteer translators. After translation, the profile appears live on Kiva.org

3) Lenders like you browse the entrepreneurs’ profiles and choose someone to lend to, using PayPal or their credit cards.

4) Kiva provides the funds to our Field Partners by aggregating the loan funds from all contributing lenders. Most Field Partners then use the Kiva lender funds to backfill the loan they’ve already disbursed to the entrepreneur. Disbursals can happen up to 30 days before, or 30 days after a loan request is uploaded to the Kiva website.

5) Over time, the entrepreneur repays her loan. The Field Partner collects those repayments and lets Kiva know if a repayment was not made as scheduled. We give Field Partners the option to cover both currency losses and entrepreneur defaults.To speed things up and to minimize the number and expense of wire transfers, Kiva works on a net billing system. This means that, for any given month, we subtract the amount of repayments that a Field Partner owes to Kiva lenders from the amount that a Field Partner fundraises for entrepreneurs on Kiva.If the balance is positive, that means that the Field Partner has raised more than they need to repay, and we use those funds to credit your lender account with the repayments due to you. If the balance is negative, then the Field Partner has 30 days to send us a payment for the balance. As soon as we receive that payment, we use those funds to credit your lender account with the repayments due to you.
Repayment and other updates are posted on Kiva and emailed to lenders who wish to receive them.

6) When lenders get their money back, they can re-lend to another entrepreneur, donate their funds to Kiva (to cover operational expenses), or withdraw their funds to their PayPal accounts.

Since launching in October 2005, over 111 MFIs in 52 countries have raised 0% interest debt capital from 693,000+ social investors via Kiva. Kiva partners with highly reputable MFIs across the globe. As an online fundraising platform, well-established MFIs use Kiva to access low-cost debt financing from social investors via the internet. Smaller, less established MFIs also use Kiva's online platform as a source of growth capital and a way to prove their legitimacy to larger funders over time.

All MFIs benefit significantly by reducing their cost of capital and exhibiting their work and impact to an international audience - Kiva is the most trafficked website in microfinance with hundreds of thousands of site visitors each month. In fact, Kiva is on track to be one of the largest microfinance funds, experiencing an average month-to-month growth rate of over 30%.

Do you need additional information? Do you have a recommendation for a Field Partner? Wondering why Kiva does not have a partner in XX country? Are you an organization looking for a different type of partnership?

Get your questions answered at http://www.kiva.org/

*  The link was sent by our colleague Nikos Mylonopoulos