Micro-Lending through Kiva

Here is a link to this article on Kiva (page B6) I wrote for the Minnesota Conference of the United Church of Christ.

Our church is filled with extremely generous givers who rally to the cause of people in need. This is a tremendous blessing, but can be a problem for our Board of Missions which channels that giving spirit. We’ve found that varying our mission focus tends to keep people invigorated and involved. It’s a constant challenge, however, to present interesting and meaningful opportunities for mission. That’s why we were excited when we recently learned of and became involved in a new avenue for helping those in need: micro-lending.

Micro-lending — also called micro-finance or micro-credit — is the process of lending small amounts of money — as little as $25 — to people and businesses that wouldn’t ordinarily qualify for a traditional bank loan. This is most often found in developing nations where what we think of as traditional banking may not even exist, or might be reserved for only the wealthiest strata of the population.

Kiva is a non-profit organization that started within the last couple of years to facilitate micro-lending to those in need around the world. It works by establishing a link between lenders and borrowers through Kiva’s technology platform and on-site lending partners.

A lending partner is the actual field force that has a presence in or near the borrower’s location. Lending partners are most often other established non-profits. The Kiva website allows a lender to transfer funds to Kiva. Kiva then sends the money electronically to the lending partner nearest the borrower and the lending partner disburses the funds to the borrower. The lending partner also collects the repayments and channels those back to Kiva, and then back to the lender.

Kiva has an online database of borrowers where you can view the histories, stories, and photos. Since, as with any loan, there is always a risk of non-repayment, the Kiva site keeps track of the borrowing and repayment history of each borrower and lending partner. In this way you can make some judgment as to the relative security of your funds when lent to a specific place. You can also monitor the funds you have available to disburse and the borrowers to whom you’ve lent. You can also easily view the repayment history and see update information about the borrowers.

Setting up an account on Kiva is very easy. We created a primary account for our church to be the “master” account. Individual members can then create accounts of their own to view loans and their progress.

Our Board of Missions initially made three loans to small entrepreneurs in Peru and Nigeria, and have already received two repayments on our first loan! Micro-lending through Kiva is an exciting idea that eliminates about as much of the “middle man” as is possible to do, and gets money to people that need it in a very direct way. It’s very fulfilling to be able to see and read about the actual person(s) to whom you’re lending funds, and many borrowers even give updates on their situations. If you’re a church seeking to expand your outreach, Kiva may be your answer!

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