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Kiva Microfinance Loans – Consider Loaning Money to Entrepreneurs in Developing Countries


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Kiva lendee

Meet Esthere Uwamahoro. She’s 33 years old, married with two children, and lives in Kigali, Rwanda. She’s in the spare parts business, and she needs some help.

In short, she needs a micro-loan to help expand her business. Her hope is that if she has the money to buy more spare parts, she’ll have a wider selection to offer her customers. She wants her business to be successful so that she’ll be able to make more money for her family.

Normally, 99.99% of us would never hear about Esthere’s plight. How could we? We’re half way around the world.

Fortunately, thanks to Kiva, we can hear her story. Further, we can help by loaning her the money.

Kiva: Redefining Charity

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You know that old saying, “Give a man a fish, and he’ll eat for a day. But teach him how to fish, and he’ll eat for a lifetime?”

Well, that’s the philosophy behind Kiva. Kiva’s goal is simple: to connect people who have money, and are willing to lend it, to people living in poverty who desperately want to start or expand a business, but have no funds to do it. This is especially important because unlike the US, small business financing and capital aren’t easily accessible in developing countries.

The idea is brilliant. After all, the best way to alleviate poverty is to help people stand on their own two feet. Instead of feeling powerless, Kiva helps restore people’s dignity, their sense of self-worth, and their respect.

Kiva works because all the money we give is loaned out to entrepreneurs in developing countries. They use this money to open grocery stores, buy farm animals, or start small clothing shops. They buy fertilizer for their crops, add a well to a home garden, or even buy product for their stores.

Plus, 81% of all loans made through Kiva go to female entrepreneurs.

The key word here is loan. The money we send through Kiva is repaid 98% of the time. That repayment rate is astonishing.

How Kiva Works

Kiva works with thousands of micro-finance institutions around the world (Kiva calls them Field Partners). These Field Partners are located in Mongolia, South Africa, Lebanon, Peru, and pretty much anywhere else you find people living in poverty.

Any entrepreneur who needs a micro-loan will go to his or her closest Field Partner institution and apply for one. The Field Partner creates a repayment contract (which usually includes a mandatory savings clause) and then uploads the story and pictures to Kiva.

Then, lenders like us browse the stories, pick one that speaks to our heart, and make a loan. Loans can range from $25, or we can choose to fully fund the loan (which happens much more than you might expect!). Below is an example listing from the Kiva site.

kiva example listing

Once the loan has been made, it’s up to the Field Partners to collect the payments on that loan and send it to Kiva, who then sends it back to us.

Everyone wins here: we get to help someone who really needs it (i.e. good stewardship); the entrepreneur starts a business and improves his or her life; a family prospers; and we get our money back, which we can then loan to someone else if we choose.

The Most Amazing Part

Kiva is incredibly popular – and it’s really inspiring. Want proof?

When I first read about Esthere, she needed around $400 to complete her loan. I just went back to check on her profile, and now she only needs $325. Hopefully by the end of the day, her loan will be fully funded and she can go expand her business.

Last week, I went to Kiva to make a loan to someone, and something even more incredible had happened. There was not a single person on the site that needed a loan. 100% of the entrepreneurs had been fully funded, and the Field Partners hadn’t had a chance to get any new stories up on the site.


If you’re worried about Kiva being a legitimate charity, don’t sweat it. Charity Navigator has given Kiva a 4-star rating, which means it’s a charity you can trust.

Final Word

Kiva is a wonderful charity because the organization is truly helping change people’s lives. When you give through Kiva, you’re helping someone better his or her life in a way that will last. And, you get your investment back.You’re not just giving, you’re loaning.

It’s easier to fit giving into your budget with Kiva because your loan comes back. You can then choose to put the money back in your bank account, or you can choose to pass it on to someone else who needs it. Having just $25 or $50 floating through Kiva can help dozens of people around the world. This is why Kiva is one of my favorite charities.

Have you ever loaned money through Kiva? If so, who did you help? Did your loan get repaid?

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Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Heather Levin is a writer with over 15 years experience covering personal finance, natural health, parenting, and green living. She lives in the mountains of Western North Carolina with her husband and two young sons, where they're often wandering on frequent picnics to find feathers and wildflowers.