Have you ever thought about starting a business, or embarking on another costly adventure? If you have, then you’ve probably realized that doing so involves saving your money, possibly taking out loans, transferring money between accounts to make payments, and acquiring insurance. It’s a lot to think about! Here in America we are lucky to have banks and insurance agencies available to help us do these things, assuming we meet some basic requirements. In many parts of the world however, these institutions and procedures aren’t even available to people. When someone in a small Bolivian village seeks to buy a tractor to multiple their produce and feed their family and their village, it’s very difficult to do so without these institutions in place. Thus, many people around the world are subject to a never-ending cycle of poverty.
Enter Kiva, a company that seeks to help! Kiva is an organization that helps to provide the loans these people need to, let’s say, obtain that tractor to increase their produce, start their own business, and go to college. It employs a system called microfinance, which means to supply financial services to low-income clients. In the case of Kiva loans, YOU are the supplier of financial services. People without resources make pleas on Kiva.org stating who they are, where they’re from, what their financial needs are, and what they are to be used for. Then YOU make a payment to help them. Your contribution can be as low as $25 dollars to fund someone’s project. The money gets delivered to the chosen recipient via Kiva’s field partners, and as a contributing partner, you will receive feedback on the status of your contributions. When enough people contribute to meet the recipient’s goal, the hope is that the money you invested will grow as a result of their needs being met, and not only will you be paid back, but you the recipient will then lead a healthier, more stable, and prosperous life.
It’s slightly confusing at first so let’s take a closer look.
Here is Sandra Del Socorro of Nicaragua
She needs $500 to buy metal sheeting and roofing timbers for her home. If you contribute $25 towards the funding of her home renovation, then Sandra can buy the materials necessary to repair her home. Then, the money Sandra saves from not having to pay the damages accrued from not having a roof allows Sandra to pay you back, and lead a healthier, happier life.
Sounds pretty good right? It is! Your contributions are definitively going to help someone. However, it’s important to keep in mind that not all contributions made will be paid back, thus you may want to be careful about how much money you put into a project. That said, Kiva has a 99.03% success rate with loan repayments, a remarkably great rate, but even if your loan does not get paid back, you are putting up money towards a good cause, and can take comfort in that. Take a look at the webpage above, and if you have $25 to spare, consider making a contribution.