How a Little NGO named Kiva is Changing the World in a Big Way
You never forget your first loan
Serenita Mikaele and I are both 23-year-old females–other than that, we don’t have very much in common. She is a wife, mother and entrepreneur living in Taufusi, Samoa; I am an idealistic student living in Toronto. Her day typically consists of selling crafts at her local market and providing for her family; mine revolves around reading, writing, and drinking too much coffee. Although we live continents apart, I know of Serenita because I am a shareholder in her business.
Before I tell you how exactly this came to be, I’ll start with something more familiar.
Many of us have grown up with the knowledge, and guilt, of relative privilege. We in the West have heard stories about “the rest”: accounts of rampant exploitation, starvation, powerlessness. We have also seen the images: swollen bellies, pleading eyes, decaying houses. We know that the majority of the world’s people are living on a few dollars (if that) a day.
Despite the immense diversity of impoverished communities, we somehow sweep them all under the umbrella term “third world” and agonize about how we can possibly affect something so big.
Last year, in my first critical development course, I began to question the often well-meaning but (let’s face it) condescending ways in which we talk about the majority of the people on Earth. We send coalitions of the concerned to areas that are “out there” with preset models, worn-out ideas and condition-laden aid. In most mainstream development work, locals speak but are not really listened to. They are manoeuvred into feeling that their ideas and opinions are uninformed. How often do we hear their ideas?
It is against this backdrop that I learned of Kiva–the first person-to-person micro-lending website. Kiva makes it possible for ordinary people, like me, to lend as little as $25 to other ordinary people in underprivileged regions that have their own ideas about how to better their living conditions.
Instead of the pitiable images of beggars, we can browse through fairer depictions of individuals and groups in need of small loans to fund their initiatives. Picture a tailor in Tajikistan or a florist in Peru–suddenly, it is possible to offer them a hand-up instead of a hand-out. We can interact on a more level ground: partner to partner, not noble rescuer to charity case.
The more I learned about Kiva’s structure, the more I liked this small San Francisco-based NGO. Its founders are a young couple, its processes are very transparent, and its objective is quite simple: Kiva aims “to connect people through lending for the sake of alleviating poverty”. As New York Times columnist Nicholas D. Kristof writes:
“Web sites like Kiva are useful partly because they connect the donor directly to the beneficiary, without going through a bureaucratic and expensive layer of aid groups in between.”
Some of the loans I've helped fund
In an interview for Social Edge, co-founder Jessica Flannery joked about how Kiva was born of her passion for Microfinance and her husband Matt Flannery’s passion for innovation on the Internet. The demand for their service turned out to be much larger than either partner expected. Matt admits that the site began as a hobby but, after being featured on a popular blog, the website’s traffic picked up significantly-and I won’t even get into how it skyrocketed when it was endorsed by Oprah.
Now the Flannerys have much higher hopes for how big Kiva may actually get. In fact, Matt hopes to contribute to what he hopes will be “a fading distinction between what we call the ‘third world’ and what we call the ‘first world'”.
Citing examples of lenders in Mexico lending to other Mexicans, or lenders in India supporting Cambodians, Matt goes on to assert that we are now blurring the lines between the traditional givers and benefactors of assistance.
Such global partnerships are blossoming on Kiva. After lending to Serenita, my picture appeared in a gallery of international lenders, such as Fabian from Germany, Toin from the Netherlands, Beth from the USA, Alberto from Italy and Christopher from the UK. My own $25 loan wouldn’t have done much but, collectively, we helped Serenita reach her goal of $825.00-money that the big banks would have almost certainly denied to her and on which local lenders would have charged debilitating interest. Over the next 12 months, she will use those funds to buy new handicrafts, grow her business and repay us.
When we get the money back from Serenita, we can withdraw it, lend it to another entrepreneur or donate it to Kiva. This kind of philanthropic flexibility is a brand new concept to me. Instead of funding a night of binge drinking, my small but sturdy first loan is now helping Serenita help herself. All of this made me think: Serenita may have fewer financial resources than I do, but she has just as much human dignity.
The fact that I’m in a position to lend is mostly just luck of the draw. I don’t pity Serenita; I admire her. I’m not giving out of guilt, but investing in good faith.
I know Kiva isn’t a universal remedy but it is a viable option that very few Canadian students know about. According to Alexa, Americans are taking a leadership role, comprising almost 30.1% of Kiva lenders. Behind India, Peru, Germany, Indonesia, Thailand and South Korea (in that order) Canadians account for a mere 2.8% of Kiva lenders.
So Canada, how about forgoing your Tim Horton’s coffee for two weeks and putting the money towards something new? I promise the good feeling will last longer than a caffeine rush; and there’s potential here for a much healthier addiction.
A version of this article was published in the December 2008 issue of MacMedia magazine