Microlending: A Little Loan Goes a Long Way

(Page 2 of 2)

October/November 2007
By Bill Moore 
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According to Fiona Ramsey, Kiva’s public relations director, the average loan amount is $80 — often spread over several borrowers — and the average time it takes to fill a loan request on the site is one and a half days.

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To date, no loan requests have gone unfunded, and of the 1,700 loans that have matured since the inception of the program, Kiva’s default rate is 0.2 percent. Borrowers understand, and even insist, that the funds are not charity, and that they will be paid back at the end of the contract period.

In the three years since its launch, 58,000 people (including this author) have loaned a total of $9.5 million to 14,400 entrepreneurs in 35 countries, and those numbers increase daily. Lenders have the option when the loans mature to take their funds out of Kiva or re-lend it. While lenders currently don’t collect interest on their loans, Kiva is looking at implementing a modest interest rate to help service the loans and attract more lenders.

Grameen Bank reports that, according to third-party studies, 5 percent of impoverished borrowers rise above the poverty level each year with the help of micro-loans. There are millions more like Begum who simply ask for a chance to help themselves. You can meet some of them at www.kiva.org.

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