How Kiva Works



Kiva began in 2005 after a young couple, Jessica Jackley and Matt Flannery, traveled to Africa to assess how micro-finance affected poor communities there. They grew increasingly concerned that the dependence of micro-lending on local banks, who charged high interest rates, discouraged potential entrepreneurs. Soon after returning home to San Francisco, they launched Kiva, a micro-lending website where individual people can make small affordable loans to the working poor of the world.

This is how it works!

1) Kiva partners with 142 micro-finance institutions around the world that identify low-income entrepreneurs in their service area, who are considered low-risk for defaulting on a loan.

2) These micro-finance institutions, called Kiva Field Partners, post the photo, profile and loan request of these vetted entrepreneurs on the Kiva website.

3) Kiva lenders browse these listings, choose an entrepreneur they want to help, decide the amount they want to contribute toward the loan request, and make an online payment. Since the average Kiva loan request is $500, it typically takes 20 individual lenders, loaning $25 each, before a loan is fully funded.

4) Once the loan is fully funded, Kiva transfers the money to their Field Partner that administers the loan for the entrepreneur.

5) During the term of the loan, the entrepreneur makes small repayments to the Field Partner, which are transferred back to Kiva and credited to the lender’s account.

6) Once the loan is fully repaid, Kiva lenders can choose to re-loan their credit, contribute their credit to Kiva's operating expenses, or request a refund. 80% of Kiva lenders re-loan their credits over and over again.

It’s important to understand that Kiva lenders are not making donations or giving handouts, rather, they are engaged in transparent partnerships with low-income entrepreneurs. Most of the poor in the developing world are self-employed, thus, a small loan can help them sustain their business and EARN their way out of poverty. Kiva borrowers have said, beyond receiving financial assistance, it gives them hope and self-respect knowing many people trust their ability to run a successful business and repay their loan.

The Kiva model is so simple. Lend $25 and change a life; get $25 paid back, re-lend it, and change another life! 100% of the money from Kiva lenders goes to the entrepreneur.

Since Kiva began just 7 years ago, it has facilitated $303,554,000 in loans to 769,000 entrepreneurs with an incredible 98.9% repayment rate! 
We hope you're inspired to learn more about this new type of philanthropy called micro-lending by joining our Kiva team and becoming a Kiva lender today!

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