It’s been five years since I last talked about Kiva.org, the microfinance / underwriting website I’ve been a lending through for the last 11 years. By the end of 2015, I’d lent about 300 USD. So how is my Kiva in 2020? I see I’ve lent 675 USD, so that’s a nice doubling but off an investment pool of 105USD, which I don’t think I’ve added to in a while.
I’ll be honest, my biggest issue with Kiva is that I forget about it. They do send me reminders when I’ve been repaid enough money to take part in another loan (usually 25 USD), but for some reason, I just don’t log in and review loans which are currently available to be funded. That’s something I need to get on top of, along with adding to my pool, so I can begin getting more loans in rotation.
If you haven’t heard of Kiva, then go and check out their about page, but in essence, it’s a microfinancing site meaning that lots of people (like crowdsourcing) contribute a small amount of money like 25 USD to loan a person in, say, Viet Nam, 1000USD to improve irrigation on their farm. They then pay the money back. You don’t get interest on the loan, and due to FX and local conditions, you may not get all of your money back. In the years I’ve done it, I’ve not lost much at all. This is not a for-profit investment vehicle though, it’s more about philanthropy.
It can be more complicated than that though; in some situations, you’re underwriting the loan, rather than making it, and the local lending partners may make some interest to cover running costs, but broadly, you’re helping loan money to people in parts of the world where loans may not be simple.
As I noted in 2015, it now also seems to have a lot of US based entities. I’m not against it still, but since the US has an established financial loan system, I still focus in developing and troubled parts of the world for my loans, but that’s one of the strengths – you can choose where your money goes.
Forbes has a couple of nice articles on how Kiva often lends to refugees who are generally outside of any traditional lending framework, but who can work with organisations and then with Kiva to get loans to rebuild their lives. It’s not something we really hear much about.
Anyway, take a look if it sounds interesting, and perhaps help with some loans yourself.