Investors who log on to Kiva will see profiles of a Russian dance teacher in San Jose, California who wants to open her own studio and a New York taxi driver ready to invest in a newer taxi, next to a father of five in Azerbaijan hoping to buy two calves to supplement his income. Microloans are aimed at helping people raise themselves out of poverty. Muhammad Yunus won the Nobel Peace Prize in 2006 for developing the concept of microcredit. The loans are usually a few thousand dollars — in developing countries even a few hundred dollars will suffice — and designed for people who can't get traditional bank loans.
Kiva Partners with Non-Profits to Bring Microfinance to the U.S.
Among the first American entrepreneurs waiting for loans are: two men who want to grow their environmentally sensitive landscaping business, a Filipino immigrant offering homecare for the elderly, and a Mexican lady with a fruit juice bar and cafe. In order to serve clients in the U.S., Kiva partnered with two organizations that have successfully practiced microlending for years. One is Boston-based Accion USA, a national organization that provides loans to small business owners who don't qualify for bank loans, the other is San Jose-based Opportunity Fund, a community development institution that makes small-business loans in the San Francisco Bay area.
Kiva's Platform Looks Like Social Networking Site
While charity contributions have declined during the economic crisis, microfinance continues to grow. Visitors to the Kiva website have made loans totaling more than 75-million in less than four years. Individual contributions start at $25. The Kiva site is transparent and facilitates one-on-one connections that appeal to the Facebook generation. The individuals applying for loans are real people waiting for socially-minded lenders to help them. Their profiles include photos, business updates and loan repayment info. Investors immediately see who gave how much to whom as lenders' photos show up on the borrowers' profile.
Microfinance Grows Into a Respected Investment Tool
The need for loans has climbed dramatically with the economic downturn, as banks tighten their lending standards and more newly unemployed people look to entrepreneurship for a living. At a Microfinance California event at Stanford University in May 2009 presenters agreed, that microloans are a financial ray of hope. Microlending institutions like Opportunity Fund also provide financial counseling and business advice, desperately needed by families who have no banking experience.
"Financial education holds the power to transform the cycle of poverty into a cycle of prosperity," said Emmett Carson, CEO of the Silicon Valley Community Foundation at the event. (SFGate, 5/29/09)
CNN Video on Microfinancing in the U.S.
Microfinance Movement Grows at Impressive Rate
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