During my time in Haiti I witnessed the benefits of micro-lending first hand. The idea of providing low- or no-interest loans directly to small entrepreneurs appeals at many levels. It’s a direct person-to-person connection that sidesteps much of the bureaucracy of institutional philanthropy, and it fosters small-scale initiatives that are simultaneously rewarding, and useful.
I plunked a hundred dollars into a Kiva.org account over a decade ago, sifted through a range of fledging entrepreneurs, and designated $25 each to four different endeavors. Each time a portion of a loan gets repaid, I designate to a new endeavor. Today, my initial $100 has been lent and repaid eight times over. A very good return on investment.
I’ve also realized that I gravitate toward a particular loan-seeker profile: a person wanting to start or expand some kind of construction. This makes obvious sense for an architect, yet also appeals to my penchant for KIVA loans with a business focus. I don’t have a gender or geographic focus: I lend to women and men all over the world. I shy away from folks wanting money to build their own house, because, even though everyone deserves a house, I don’t see how it generates cash flow for repayment. And I don’t lend to people in retail. Retail is just not my thing.
Last Christmas I gave everyone on my (admittedly small) gift list a $100 KIVA gift card. Recently, I checked in with each of them and asked how they allocated their loans. The responses I received made me appreciate the infinite customization KIVA offers micro lenders.
I was not surprised by my boyfriend Dave, a gentleman farmer, distributed his loans for agricultural purposes. Or that my daughter, a former Peace Corps volunteer in Cambodia, selected businesses in Southeast Asia. But why did my son plunk his full amount on a woman in the Solomon Island to buy a piglet? While most KIVA loans include an aggregate of small amounts from multiple donors, he looked specifically for folks seeking $100 exactly, and fully funded one person’s dream. KIVA loans can be seriously, or serendipitously applied. One of my recipients—who shall remain nameless—admitted to lending money only to gorgeous men from the Middle East. Clearly, KIVA offers something for everyone.
KIVA has a four-star rating on Charity Navigator, 94 out of 100 possible points. That’s not perfect, but for me KIVA includes a worthy fun-factor: exploring potential borrowers and guessing how this loan might change their life. Not everyone will enjoy this: one of the people I gifted hasn’t used their card, thus reminding me of the hazards of gifts that require recipient involvement. No matter, if the card goes unused, the money will revert to KIVA administration: it must take some money to collect a world-wide array of aspirants. And worthy aspirants they are: KIVA’s repayment rate is very high; the default rate on my donations is less than 2%, ensuring a constant cycle of repayments to redirect again and again.
So if you are inclined to make a macro-impact on the life of a person you’ll never meet, consider buying a Kiva card. Better yet, give them out to the people you love, and let everyone KIVA in the way they like best.