Wednesday, October 21, 2009

Kiva: Loans That Change Lives

Having experienced some small success with my Etsy business, I found I had a bit of money in my PayPal account. I thought I should buy a pretty little something for myself, or invest in some advertising for  my shop. But then I thought that since this was the first amount of money I had earned for myself in many a year, I wanted to do something special with it.  I remembered that a few years ago I read a magazine article about a new area of finance called "microloans". The article detailed how people with small amounts of money can help fund entrepreneurs in third world countries by making loansof money to be repaid in a specified amount of time. These loans frequently go towards helping women start businesses and by doing so, improve their living conditions and their status in their families and communities. The effect a successful business in an impoverished community has is rippling. A businesswoman can afford clean water and food, she can send her children to school and she can build a safe home for her family. She can afford medical care. She has power and respect, and has the ability to leave situations of domestic violence. At the time I read this I thought it was a wonderful idea and it was something that I would do if I ever had a bit of spare money of my own.

Yesterday I went online to search for a means to do this. I couldn't remember the name of the company that the magazine article was about, but I found Kiva instead. Kiva is a person to person lending website that allows people to lend money to people who need small amounts to start or expand their businesses. You can make loans of as little as $25. When that money has been repaid, you can reinvest it in another business or you can put it back in your PayPal account.

I decided to loan money to a woman living in Nigeria. She sells "fufu", a food made from fermented cassava. She needed a loan to buy more cassava so she could sell more fufu and make more profit. By the time I got up this morning, she had the full amount of her requested loan. Lenders from all over the world have given small amounts of money to equal the amount she needed and now she has enough to buy her cassava. In three months time, she will begin her repayments. Kiva has an excellent repayment record, so lenders money is safe.

I am so happy that Kiva supplies a way for people to help one another in this way. It warms me to think that the money I earned through my small business is now helping another woman on the other side of the world with her business.