First What Is Kiva?
Kiva Lets You Loan to the Working Poor
Kiva's mission is to connect people through lending for the sake of alleviating poverty.
Kiva is the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs around the globe.
The people you see on Kiva's site are real individuals in need of funding - not marketing material. When you browse entrepreneurs' profiles on the site, choose someone to lend to, and then make a loan, you are helping a real person make great strides towards economic independence and improve life for themselves, their family, and their community. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates and track repayments. Then, when you get your loan money back, you can relend to someone else in need.
Kiva partners with existing expert microfinance institutions. In doing so, we gain access to outstanding entrepreneurs from impoverished communities world-wide. Kiva partners are experts in choosing qualified entrepreneurs. That said, they are usually short on funds. Through Kiva, there partners upload their entrepreneur profiles directly to the site so you can lend to them. When you do, not only do you get a unique experience connecting to a specific entrepreneur on the other side of the planet, but the microfinance partners can do more of what they do, more efficiently.
Kiva provides a data-rich, transparent lending platform. Kiva is constantly working to make the system more transparent to show how money flows throughout the entire cycle, and what effect it has on the people and institutions lending it, borrowing it, and managing it along the way. To do this, we are using the power of the internet to facilitate one-to-one connections that were previously prohibitively expensive. Child sponsorship has always been a high overhead business. Kiva creates a similar interpersonal connection at much lower costs due to the instant, inexpensive nature of internet delivery. The individuals featured on the Kiva website are real people who need a loan and are waiting for socially-minded individuals like you to lend them money.
(The above is from the Kiva website, edited to be in the 3rd person)
If you're concerned about loosing a lot of money don't be. You don't have to solely carry all the risks of a requested loan, many people contribute (in increments of $25) to the loan collectively. A simplified example would be, a person or group needs $1000 if each lender contributed $25 that would be 40 lenders sharing the one loan and if for some reason the entrepreneur failed and defaulted, no one person would be out more than the $25 they contributed.
It's a good way to reduce your risk, contributing small amounts to many rather than a large amount to one. For example if you wanted to loan out $200 give eight entrepreneur $25 each rather than $200 to just one. Many other will also contribute to that same eight to get the full amount each needs.
When one person helps a little, by itself it's not much of a difference, but add that to thousands of other doing the same it makes a huge difference to a lot of people.
