As some of you may have noticed already, Amazingy Magazine has been sporting a Kiva button at the bottom of our homepage for a while now. High time that we tell you a little bit more about it what Kiva is, and how this anti-poverty organisation works.

When Amazingy’s founders, Floris and Ingrid, took those first few steps into the unknown by starting their own company, they knew right from the start that it wasn’t just about personal success — they also wanted to help other people realize their own dreams. Kiva is just one of Amazingy’s partnered charities.

What is Kiva?

Kiva, which means ‘unity’ in Swahili, was founded in 2005 by Matt and Jessica Flannery. The non-profit organization allows people to lend money over the internet to low-income and underserved entrepreneurs and students all over the globe. Kiva’s mission, in their own words, is “to connect people through lending to alleviate poverty.”

Today, Kiva has helped people in 82 countries, having lent out a combined $785,365,400 in almost a million interest-free loans, provided by 1,353,740 donors who each funded a loan.

Kiva itself does not collect any interest on these loans, nor do the Kiva lenders themselves. The entire organization is purely supported by loans, grants, and donations, not just from its users, but also corporations like Visa and Google, as well as national institutions.

How it works

The process is fairly simple:
Kiva allows microfinance institutions, socials businesses, schools, and non-profit organizations, all combined called field partners, to post profiles of local entrepreneurs that are deemed qualified for a loan on the Kiva website.

Lenders who have signed up on the Kiva site can browse and choose whichever entrepreneur, student, or private person they wish to fund with a loan. The next step for a lender is to transfer their funds to Kiva by using PayPal. Kiva, after having received the lender’s money, combines loan capital from multiple individual lenders and transfers this amount to the appropriate field partners, who in turn are charged with ‘delivering the goods,’ that is, giving the money to the chosen entrepreneur.

Though Kiva does not charge any interest on these loans, the field partners do, to cover the administrative costs of overseeing so many small loans. As the entrepreneurs start to repay their loans with the added interest from the field partners, the field partners then send the funds back to Kiva. As soon as a loan is repaid, a Kiva lender can choose to withdraw their funds or re-lend the amount to another entrepreneur.

To supplement this model, Kiva launched Kiva Zip in 2011, which is a 0% interest peer-to-peer lending program, at the moment only operating in the US and Kenya. With Kiva Zip, lenders can loan as little as $5 at a time. Lenders can also use the Kiva Zip platform to directly communicate with the loan recipient, something impossible under the original Kiva lending model.

The loans provided on Kiva Zip often go to owners of small businesses who have been rejected for loans by more traditional institutions. To become eligible for a Kiva Zip loan, borrowers can be vouched for by trustees such as local non-profits and service organizations, businesses, or community leaders.

Areas of focus

Kiva has always been about supporting anyone in need, but as of 2012, more than 80% of Kiva’s loans have been made to female entrepreneurs, as part of an effort to support female-owned businesses that suffer under patriarchic systems in developing countries.
Women seem to gain the most from this form of microcredit. In many developing countries, patriarchy and a strict division of labor dominate large parts of society, with women suffering most from the poverty caused by this this imbalance.

Kiva also added a new category of loans in 2011 called green loans. These loans are meant to help borrowers convert to cleaner and safer forms of energy, agriculture, transport, or recycling. One area this has had particular success is in food preparation. Green Kiva loans have helped many people switch to clean-burning power sources for their cooking, like biofuels and solar panels, allowing them to stop using dirty fuels like wood, coal, or even animal waste.

If that wasn’t enough, Kiva also strongly supports higher education in developing countries, where it is extremely difficult for students from poor backgrounds to gain access to universities or graduate-level education. To help promote access to education, in 2010, Kiva started a Student Microloans program, which allows lenders to loan to students to help them pay for higher education. Students who receive funds have up to three years to repay their loans.

Amazingy and Kiva

Amazingy’s tagline has always been ‘Do good, look good, feel amazingy’, which is something founders Ingrid and Floris try to live by as much as possible.

Employees of Amazingy can give loads to who ever they wish using Amazingy’s own section on the Kiva homepage. I sat down with Ingrid and Floris to talk a little bit about their decision to work with Kiva.

Ingrid:

I’ve always liked the concept of microcredits, being able to help people and entrepreneurs who have no other access to loans, especially in developing countries. As a woman, I generally prefer to support other women, as I believe that is something that is not done enough in some areas of the world. I like the idea of being able to support an entire economy with such loans, making people self-sufficient, instead of just donating clothes or money, which is still something we regularly do as well.

Floris adds:

“I got confirmation from my father that the Kiva concept really works: when he was in Cambodia some years ago, he met a woman selling fish on a market he frequented, and ended up giving her money so she could by a bicycle, one she could use to cycle back and forth to the river to catch fish. Three years later, he went back to the same place, and there was this woman again. She immediately ran up to him and told him that that gift was the start of her business. She now had six employees, all with their own bikes, and ran a successful business. She even wanted to pay him back right away — but I think he refused that.

Amazingy has already given out several different loans with Kiva. We supported a group of women in the Philippines to help them buy fish to sell in their store. We gave a loan to Kantutas Group in Bolivia so they could buy wholesale cosmetics, which they can resell in order to keep their business alive. Other loans have been used to buy a solar system for a small farm in Kenya, a computer in Palestine so a student could apply for a BA in Business Administration, and agricultural supplies in Nicaragua for a coffee farmer. The list goes on.

Life-changing holiday gifts

With the holiday season coming up, signing up on the Kiva site to become a lender is sounding better than ever. It also works as a gift — there are Kiva gift certificates that allow the recipient to make a loan directly to an entrepreneur in the developing world. Want to start spreading the holiday cheer? Head to Kiva’s homepage and change a life!