Kiva partners with existing microfinance institutions around the world (we call them Field Partners). These organizations that have expertise in microfinance and a mission to alleviate poverty facilitate Kiva loans on the ground. Our Field Partners know their local area and clients and do all the leg work required to get Kiva loans to the entrepreneurs posted on Kiva.org.
2) Field Partners Disburse Loans and Upload Stories
Field Partners disburse loans as soon as they are needed. They can do this up to 30 days before the loan request is posted on Kiva’s website or 30 days after (most choose to disburse funds before the loan request is posted). The Field Partner collects entrepreneur stories, pictures and loan details and uploads them to Kiva. Volunteer editors and translators review the loan requests and publish them to Kiva.org. Many Field Partners require mandatory savings as part of the loan cycle in order to ensure that borrowers represent a good lending risk and can build up cash reserves.
3) Lenders Browse Profiles and Lend
Lenders browse loan requests and select which ones they’d like to fund. Lenders can fund as little as $25 and as much as the entire amount of the loan. To help streamline the loan transaction process, loan requests posted by the Field Partner are rounded up to the nearest $25 increment. Kiva aggregates funds from Kiva lenders and provides them to the Field Partner.
4) Kiva Disburses Lenders’ Funds to the Field Partner
The Field Partner uses the funds to replenish the loan they’ve already made to the entrepreneur. Kiva provides these funds on a schedule that accommodates the Field Partners’ banking procedures.
5) Entrepreneurs Repay Their Loans
The Field Partner collects repayments from Kiva entrepreneurs as well as any interest due and lets Kiva know if a repayment was not made as scheduled. Interest rates are set by the Field Partner, and that interest is used to cover the Field Partner’s operating costs. Kiva doesn’t charge interest to its Field Partners and does not provide interest to lenders. Kiva also gives Field Partners the option to cover currency losses. Learn more
To minimize the expense and maximize the efficiency of money transfers, Kiva works on a net billing system. This means that, for any given month, we subtract the amount of Field Partner repayments from the amount of loans made by Kiva lenders. Kiva only asks our Field Partners to send payments for the difference and they have 30 days to send payment.
6) Kiva Provides Repayments to Lenders
If there is already money in the Field Partner’s account, or once their payment is received, Kiva uses these funds to credit the appropriate lenders with their loan repayments. Lenders can re-lend their funds to another entrepreneur, donate their funds to Kiva (to cover operational expenses), or withdraw their funds via PayPal.
“It terrifies me…
That so many people believe it is wrong that their hard work and money go toward helping the helpless with social programs and universal health care. That they believe for some reason that these people don’t deserve what they have.
It terrifies me that people still believe they have no duty or requirement to support those less fortunate than they are.
Better education is needed. I’m not sure if they truly know that these ideas are similar to ideals in Hitler’s agenda. I’m not calling anyone a Nazi. Ignorance is inexcusable but it is not evil.
I just wish people would take the time to realize what they believe and the history behind it.”—walex
I’ve just made my 100th loan on Kiva. I usually only lend $25 to each entrepreneur with the money going round and round the system. I’ve only had two loans that haven’t been repaid fully as the Field Partner (same one for both loans) had difficulties when the Founder died.
If you have about £16/17 / $25 to spare, Kiva is definitely something to look in.