What is microfinancing?
"Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime." (Chinese Proverb)
Well at Kiva they say, what if someone knows how to fish, but needs a net? Those living in poverty often times don't get the financial services they need and are unable to make savings accounts or get the loans they may need. Without a savings account or knowledge of the basics of finances these people aren't able to properly save money. They may hide the money to keep it safe or buy assets they can sell (animals, gold, etc.). But, those aren't stable ways of saving money since there are millions of different things that could happen to those savings (your animal gets sick, someone steals your money, a natural disaster, etc.) To get out of the cycle of poverty by creating a business or funding your child's education, you need to have the resources and money to do it. Microfinancing provides small loans and basic financial services to the poor to these people to get their projects started. Over time, they repay the person as their business kicks off or their child finishes his/her education.
Modern microfinance came when a man named Dr. Mohammad Yunus in Bangladesh loaned money to a group of women and they were able to fund their businesses and break the cycle of poverty. Microfinancing a woman is microfinancing her village because she hires other women to work for her, pays for her child's education, and works for the betterment of her family and community. Today about 160 million people living in poverty around the world are getting microloans.
What is Kiva?
Kiva connects millions of people (they have one million+ lenders and one million+ borrowers!) together to alleviate poverty. Its the world's first and largest micro-lending website so anyone with an internet connection and just $25 can change the life of someone across the world (or in America, wherever you want to spend your money). Kiva is currently in 72 different countries so you can sit in your desk in California and loan a woman in Ukraine $25 so she can buy a cow -> sell milk and cream to her community -> create a business -> properly save her money and become financial savvy -> pay off her loan while keeping her business going -> send her children to school and support her family -> empower her community. See the difference $25 (aka just one shirt at the mall for you or a trip to the grocery store) can make on a person's life? And in the end they repay you and you can either take those $25 back or recycle it and lend to someone else! Its super simple to start on it, and you can even make your first $25 loan for free here.
The simple proces: 1. Choose a borrower, 2. Make a loan, 3. Get repaid, 4. Repeat!
Check out Kiva's site here!