KIVA

During assembly on Monday, October 27th, sophomores Ann E Diemer and Hannah Heard showed a news story originally aired on PBS’s Frontline about KIVA, an organization that facilitates person-to-person micro-loans from First World lenders to entrepreneurs in developing countries. Ann E and Hannah are members of a KIVA club at Burroughs which has already awarded multiple loans.

The Frontline story featured a small village in Uganda where KIVA loans have been very successful. Frontline reported that local banks might charge as much as 35 percent interest, and local moneylenders might charge as much as 300 percent interest.  KIVA matches individual benefactors with individual entrepreneurs via the Internet. Recipients pay no interest but must repay the loans within one year. Funded projects have included fruit and charcoal stands, a furniture and brick-making business, and a peanut butter producer. Loans have ranged from $100 to $1000. Local partner organizations help evaluate the worthiness of proposed projects and monitor their progress. One of the benefits of this form of micro-lending is that web benefactors may be in direct touch with the people they’re helping via the internet.  Just this week, KIVA loaned more than $700,000 – a loan made every 26 seconds by more 10,000 people from across the world.  Thus far the default rate is a remarkable 2 percent.

The Burroughs chapter of KIVA has raised almost $1000 and has made 11 loans to entrepreneurs in Nicaragua, Tajikstan, Pakistan, Azerbaijan, Cambodia, Bolivia and Mexico.