Kiva.org: Loans that Change Lives

Rating: 4.32 stars   34 reviews

Issues: International, Economic Development, Microfinance

Location: 3180 18th Street Suite 201 San Francisco CA 94110 USA

Mission: Kiva's mission is to connect people through lending for the sake of alleviating poverty. Kiva is the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world. The people you see on Kiva's site are real individuals in need of funding - not marketing material. When you browse entrepreneurs' profiles on the site, choose someone to lend to, and then make a loan, you are helping a real person make great strides towards economic independence and improve life for themselves, their family, and their community. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates and track repayments. Then, when you get your loan money back, you can relend to someone else in need. Kiva partners with existing expert microfinance institutions. In doing so, we gain access to outstanding entrepreneurs from impoverished communities world-wide. Our partners are experts in choosing qualified entrepreneurs. That said, they are usually short on funds. Through Kiva, our partners upload their entrepreneur profiles directly to the site so you can lend to them. When you do, not only do you get a unique experience connecting to a specific entrepreneur on the other side of the planet, but our microfinance partners can do more of what they do, more efficiently. Kiva provides a data-rich, transparent lending platform. We are constantly working to make the system more transparent to show how money flows throughout the entire cycle, and what effect it has on the people and institutions lending it, borrowing it, and managing it along the way. To do this, we are using the power of the internet to facilitate one-to-one connections that were previously prohibitively expensive. Child sponsorship has always been a high overhead business. Kiva creates a similar interpersonal connection at much lower costs due to the instant, inexpensive nature of internet delivery. The individuals featured on our website are real people who need a loan and are waiting for socially-minded individuals like you to lend them money.
Results: Time since launch (January 2006): 30 months Loans: $37 million, growing $1 million every 10 days Lenders: 270 thousand people from +70 countries Borrowers: 40 thousand entrepreneurs from +40 countries MFI Partners: 100 MFIs, growing at 3 a month Traffic: +100 thousand visitors / week Activity: Loan made every 37 seconds Risk: 97% active loans on time / 1.72% default rate (all partners) Org Size:  30 employees / +400 volunteers Leverage: Platform raises $8 for every $1 in expenses. Goal: $1 Billion from 10 million lenders in 5 years. Total value of all loans made through Kiva:  $37,281,060 Number of Kiva Lenders: 320,425 Number of loans that have been funded through Kiva: 52,847 Percentage of Kiva loans that have been made to women entrepreneurs: 77.20% Number of Kiva Field Partners (microfinance institutions Kiva partners with): 89 (growing 3 a month) Number of countries Kiva Field Partners are located in: 42 Current repayment rate (all partners): 98.28% Average size of loan for funding: $480.44 Average total amount loaned per Kiva Lender (includes reloaned funds): $116.74 Average number of loans per Kiva Lender: 3.03
Target demographics: Impoverished entrepreneurs in the developing world
Direct beneficiaries per year: >40k entrepreneurs
Geographic areas served: Global
Programs: Kiva.org is the first person-to-person micro-lending Web site, creating a way for individuals to connect with and make personal loans to small businesses in developing countries. Kiva.org partners with microfinance institutions across the globe, giving them access to Kiva.org's website to post their funding needs for loans to micro-entrepreneurs. Individuals across the globe fund these loans by sending payment via PayPal. Repaid loans are returned to individual lenders. Kiva.org's ultimate beneficiaries are micro-entrepreneurs who need a loan to start or expand a small business. Kiva.org's secondary beneficiaries are microfinance institutions for whom Kiva.org both provides an additional source of debt capital and provides an average 9% savings on their cost of capital. Finally, Kiva.org provides a way for individuals to connect with micro-entrepreneurs around the world and directly participate in microfinance.

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Community Reviews

Rating: 4 stars  

Kiva is still a great organization, with lots of opportunities to make, and dreams to fulfill !
I still have a question:
I have referred a friend and 25$ were added to my account, in which I've lent it to the most needed.
My question is: when the loan is returned, will I be able to withdraw it to my account?

If I had to make changes to this organization, I would...

loan a 1 million dollars to help others that mostly need it, in case I've become a millionare.

How would you describe the help you got from this organization?

Life-changing

How likely are you to recommend this organization to a friend?

Definitely

How do you feel you were treated by this organization?

Very Well

When was your last experience with this nonprofit?

2014

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Rating: 1 stars  

3 people found this review helpful

I'm looking at the form 990 from these clowns.

Year/ revenue / / salaries and benifits payed
2011 / 12mil / 5.5mil
2012 / 15mil / 7.25

so about half of the hard earned money you donate is going directly into their pockets.
Mr Flannery and about 20 of his croneys are making average more then 100k a year plus extra benefits. What doesn't go directly into their pockets goes to crooked international bankers
I know in your heart of hearts you want to help the people they seem to portray. Unfortunatly it looks like the main lives they want to change are there own.

If I had to make changes to this organization, I would...

Jail them

When was your last experience with this nonprofit?

2014

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Rating: 3 stars  

25 people found this review helpful

After supporting two Kiva loans in South Sudan, I began thinking about the interest rate. Of course, the loans had been pre-disbursed, so I was supporting the Kiva field partner and not the borrowers. I didn't mind that. What I did mind was the staggering interest rate (61.5%).

Okay, so microloans are expensive to administer, but in 2011 the average worldwide was just 26.9%. [1] Take away the cost of capital (7.8%), which Kiva provides free, and you get 19.1%. This is what you might expect of a for-profit Kiva field partner, and the 61.5% now seemed extortionary. Also take away the profit (2.6%) and you get 16.5%, what you might expect of a non-profit Kiva field partner.

So, why does Kiva fail to crack the whip on the interest rates of loans that use the capital it provides for free? It surely has some leverage there. I have contacted Kiva, and was told they have no plans to address what to them I have contacted Kiva, and was told they have no plans to address what to them appears not to be an issue. This is unfortunate because high interest rates are one of the main reasons microloans haven't made much progress in alleviating poverty. I suspect that, like too many charities, Kiva is more interested in growing than in furthering its stated mission.

I am staying with Kiva for now, but will make the interest rate a top criterion in selecting the loans I support. There are plenty of reasonable field partners to choose from, in a variety of countries. Here are some: Cooperativa San José (Ecuador) 15.7%, FATEN (Palestine) 18.3%, WAGES (Togo) 18.5%, CIDRE (Bolivia) 18.8%, FPW (Vietnam) 23.1%, Soro Yiriwaso (Mali) 23.1%.

If you want to dig deeper, see [2,3].

[1] www.microfinancegateway.org/p/site/m/template.rc/1.26.23685/
[2] strom.wordpress.com/2009/11/09/kiva/
[3] blog.microfinancetransparency.com/what's-wrong-with-kivas-portfolio-yield-statistic/

If I had to make changes to this organization, I would...

Use the leverage of the capital Kiva provides for free to get field partners to lower interest rates.

Was your donation impactful?

Likely

How likely is it that you would recommend that a friend donate to this group?

Likely

How likely are you to donate to this group again?

Likely

When was your last experience with this nonprofit?

2013

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Review from Guidestar
Rating: 4 stars  

2 people found this review helpful

I have been participating in Kiva loans as a lender for 4 years. The borrowers do pay interest to the local bank that manages the loan. As a Kiva lender my money, joined with the money of others, guarantees the loan, getting the banks to lend to the people. If not for Kiva, many of these borrowers would be dependent on loan sharks to fund their cyclical businesses or restock their inventory. And loan sharks not only charge a much higher interest rate, some even require the borrower sell their product to the shark at a barely profitable cost. Sure in a perfect world everyone could get loans with no interest and the bank would work for free to manage the loans but that's not going to happen. I like that Kiva helps people learn to budget their finances and grow their businesses. I don't have a lot to donate to charities. With Kiva, I usually get most or all of the money back (not counting my donation to the Kiva office) and I can then help someone else with the same money.

Was your donation impactful?

Likely

How likely is it that you would recommend that a friend donate to this group?

Definitely

How likely are you to donate to this group again?

Definitely

When was your last experience with this nonprofit?

2013

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Review from CharityNavigator
Rating: 1 stars  

5 people found this review helpful

No business can survive with a 30% interest rate. This cannot be helpful, but instead is most likely a last resort that people make in dire circumstances.

Was your donation impactful?

Likely

How likely is it that you would recommend that a friend donate to this group?

Unlikely

How likely are you to donate to this group again?

Unlikely

When was your last experience with this nonprofit?

2013

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Review from CharityNavigator
Rating: 4 stars  

4 people found this review helpful

As some have mentioned, most of the loans do have quite high interest rates. I wrote to Kiva about this and they explained that the cost of living increase in these countries can be very high (even 20-30%) and also these small finance companies also have to look after loans that don't get repaid. Often the only loans available to these people where they are have much, much higher loan rates and so in the big picture, Kiva's rates are not entirely unjustified. All in all, Kiva is providing access to loans which these people cannot get through the regular banks and most are finding it makes a great improvement in their lives. Also, there are some loans on the site which do not get disbursed to the "loanee" until the loan is fully funded. KIVA has a new site called KIVA ZIP where the loans must be fully funded BEFORE being disbursed to the "loanee". The Zidisha site, I think, is also a good option - where funds must be fully funded before being disbursed to the person needing the loan and the interest rates are much lower (between 0 and 12 approx.) but an additional 5% is paid in interest on top of the listed interest rate. The interest is paid to the person making the loan (i.e. me, you, anyone who goes on and makes a loan). It's an interesting one and, of course, one can make a little interest oneself while helping someone else in a far away land change their life. I don't think, however, we should be beating up on Kiva too much as they are, all in all, doing a good thing and are innovating all the time.

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Likely

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Likely

When was your last experience with this nonprofit?

2013

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Review from CharityNavigator
Rating: 2 stars  

2 people found this review helpful

I was initially very enthusiastic about Kiva and about supporting them as a lender. The web site in particular is very well organised; it gives you a real sense of being able, with others, to directly help those in many developing and third-world countries. Similarly, the wide range of people seeking loans from Kiva means you can support people from across the World, in different continents, who are seeking to borrow for a host of different purposes. But I became increasing concerned about the high interest rates Kiva are charging - up to 30% - and the amount leaching out into administrative charges. The final straw came when I realised they also post applications for loans from people living in the USA. Now, I am sure there are very many poor people in the US, and that small business owners there may well have difficult in financing their enterprises. But I don't think this is where Kiva should be devoting its energy or resources.

So I have scaled back my involvement with Kiva and now mainly offer finance instead via Zidisha. They have a much smaller client base (focussed in Kenya) and the web site is much less sophisticated. But their admin charges are low and uniquely, I think, they allow the borrower to set the interest rate at what they can afford (sometimes even at 0%). I will still offer some loans through Kiva, but through gritted teeth and only where they appear to be the only micro-finance organisation operating in a country I am interested in.

Was your donation impactful?

Unsure

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Unlikely

How likely are you to donate to this group again?

Unlikely

When was your last experience with this nonprofit?

2012

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Rating: 2 stars  

3 people found this review helpful

Fantastic idea. But, they do need to reduce the interest rates for the people who are getting the loans. I will still keep lending, BUT KIVA must work with the third party lenders to reduce interest rates should be their CEO and board biggest goal for the future. Interest rates are, at an all time low, around the world, it's time for hard working poor people to able to receive some of the benefits of it.

Was your donation impactful?

Likely

How likely is it that you would recommend that a friend donate to this group?

Unsure

How likely are you to donate to this group again?

No

When was your last experience with this nonprofit?

2012

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Review from CharityNavigator
Rating: 3 stars  

2 people found this review helpful

When I first found Kiva I was amazed by what they were doing. I even donated all the Christmas money I had saved for my family to the to Kiva and had my family help me choose lenders. However, after doing a bit more research, I realized that some of the problems for the borrowers (high interest rates - they state the average for all their loans is 30%! ) are not alleviated through this platform. They have started a new platform to try and alleviate this problem (Kiva Zip) , but I really do not know how much the original site is HELPING those borrowing.... when they are paying 1/3 of their principal in interest! Other microfinancing non profits (I ran into zidisha.org yesterday for the first time) do a much better job at bringing down those rates, making the loans much more beneficial for the borrowers.

Was your donation impactful?

Unsure

How likely is it that you would recommend that a friend donate to this group?

Unlikely

How likely are you to donate to this group again?

No

When was your last experience with this nonprofit?

2012

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Rating: 5 stars  

2 people found this review helpful

Kiva works with lenders to provide micro loans to people who would never have access otherwise. They connect donors and borrowers to help make a farm more productive in a poor area of the world, or help someone buy stock for a used clothing store. I truly believe they provide a stepping stone to independence in places where there are no other ways to change your life.

Was your donation impactful?

Definitely

How likely is it that you would recommend that a friend donate to this group?

Definitely

How likely are you to donate to this group again?

Definitely

When was your last experience with this nonprofit?

2012

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