October 18, 2007
Kiva Makes Loan Impact in the Developing World REAL
In the next PopTech session, it's all about change and innovation from the bottom-up.
We're talking about the power of markets and how we think about helping the 4 billion people in the world who live on $3,000 a year or less.
Does that really equate to half the world's people living on less than $2 a day? It makes me think of anyone I've ever heard complain about not having enough money in my circles, including myself. What on earth are we thinking? and complaining about?
If only we could think of the people who fall under this horrific poverty line as customers rather than aid recipients, we could really make a profound impact in the developing world. And even here at home in the U.S.
We learn that for every $1 tax dollar that makes it out of the country for aid, only 14% makes its way to its ultimate destination.
Founder of Kiva Jessica Flannery talks to us about their service which lets people connect with and loan money to small businesses in the developing world. By choosing a business on Kiva.org, you can sponsor a business to help the world's working poor make great strides towards economic independence. And if you choose, build a relationship with these people in the process.
This is a woman who always dreamed about getting involved in economic development and micro-finance in the third world. After quitting her day job, she ventured off to East Africa and Kiva.org was born.
Kiva works with lenders and microfinance institutions through an online platform they have created to lend money to the poor. The platform is transparent, meaning you can see where your money goes and flows through the entire cycle. Their lenders range from individuals, funds, such as the Kolb Family Fund, to networks and middle schools.
We see some of the businesses we could help. She shows us a butcher in Afghanistan, a popcorn maker in Samoa, a taxi driver, a produce sales woman from Ghana, a hairdresser in Iraq and so on. Most of the loan requests in these particular cases have ranged anywhere from $500 to $3,000.
Their goal is to change the way borrowers think about the rest of the world. Secondly, it is to change the way lenders think about donating money and interacting with people on the other side of the world. Through this process, people who are receiving these loans feel that they are engaging in a business transaction with a partner who they have to pay back rather than a recipient of aid.
It changes the paradigm completely. Can you imagine what you inspire when a loan is made in this way rather than the more traditional ways we have grown accustomed to? Those traditional ways that end up resulting in only 14% of the money making its way to the right people?
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Wow, awesome post. Thanks for sharing this, it's very informational.
Posted by: home loans financing | Oct 19, 2007 8:34:23 AM
Such a great concept... in some many ways, connecting and actually seeing other people humanizes them and I think makes others more likely to help.
Posted by: aop | Oct 23, 2007 5:23:00 AM