Kiva Review: Giving a Virtual Hand Up, Not a Handout

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I’ve written about Kiva before, but since I loaned some more money out today I thought I’d bring it up again. allows individuals to make loans starting at $25 to low-income entrepreneurs in the developing world, also known as microcredit. By doing so, you can provide affordable working capital for the poor (money to buy a sewing machine, livestock, etc.), empowering them to earn their way out of poverty.


So far I’ve lent money to people in Samoa, Ecuador, Ukraine, and Azerbaijan. Now, even though I’m not earning any interest on the money I loan out, I’ve read that the borrowers do pay interest on the order of 10% or more. However, these rates are still much better than their alternatives from loan sharks, and the interest goes to fund the local operations. You can view the interest “lost” as charity if you’d like. I kind of just see it as lending money to a friend – no interest, but you’re hoping to create some positive change. Payments are handled through PayPal, and they have a 100% repayment rate so far.

Here’s my favorite loan so far:

Vitolina owns a set of beach fales that she rents out to back-packers or picnickers passing through the village and works hard to keep the structures in good condition. Fales are simple, small open huts with thatched roofs built in the style of the traditional Samoan house. Vitolina?s fales are situated on a white sandy beach on the Samoan coast. She readily welcomes guests and provides them with a simple roof, unbeatable views, and home-cooked meals. She will use the loan to renovate the beach fales.

I would certainly pay for that! Now imagine that she makes a profit, builds more huts, and hires other Samoans as employees. She’s now making a self-sustaining living for herself and several other people. I get my money back, and can lend it out again somewhere else across the globe. Beautiful.

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  1. Honestly, I forget the details that made me feel comfortable lending money to them. Please check out the many journalists and bloggers that have already written about Kiva. I’m sure much legwork has been done about this company due to the immense amount of buzz they have been getting. I encourage everyone to do their own due diligence and research as well.

    From the FAQ:

    How can I be sure of the integrity of the entrepreneur? does not send loan funds directly to the entrepreneurs. Each loan is managed by a microfinance institution who we partner with and who administers the loan funds.

    Before an entrepreneur appears on our website they have first been vetted by our Field Partner for loan application approval. Each of our Field Partners use their own application procedure which has reviewed and approved. This ensures that your loan funds are actually going to genuine entrepreneurs who will use the loan for the purpose they specified.

    How does choose Field Partners? conducts extensive Due Diligence on each Field Partner. Click here for a detailed look at our Due Diligence procedures.

  2. Have you received some or part of your loan money back?

    How can I be so sure that the money is going to the people they say are getting it?

    The site is doing what the Grameen Bank has done for a long time now, but still a interesting site.

  3. That sounds great, but how do you truly know if the money is actually going to entrepreneurs in the third world? I’m not saying that Kiva is not legitimate, but that it would not be hard to create a scam version of this, where someone is making up all the stories. Or maybe not Kiva itself, but the “field partners” could be making up the stories.

  4. Maybe I’m misreading the tone of your article, but it seems as if this charitable endeavor is little different from putting your money in a bank that pays no interest and has almost none of the oversight that you would expect from a deposit in a bank that does pay interest.

    Regardless of virtuous intentions, the benefit is dependent upon if the administration is scrupulous and competent. Because of that and what I consider to be a scarcity of information on Kiva’s website, I’d feel better donating through a traditional, established charity.

  5. Certainly, everyone should give to whoever they feel more comfortable with. This certainly isn’t the only charity we’re giving to. I *do* feel that $100 given to Kiva, and continuously re-loaned out over time, has the potential to affect a lot of change. Will it be more than a one-time $100 gift to the American Cancer Society? There’s no way to know.

  6. i want to know what % the aid org is charging.

  7. John, that detail is available at the kiva website. If you really want to know, you’ll find it there.

    My wife and I haven’t loaned anything through kiva yet, but it’s on our list…

  8. “Kiva transfers funds to local partners. Partner disburses loans to each business.”

    LOL… As a person who grew up in eastern Europe and just moved to US few years ago, I call BS! I love your blog, but this one is just so naive 🙂


  9. I’ve also made several loans through Kiva (all in either Uganda or Bulgaria) and think it’s a fantastic operation. I’ve spoken briefly with one of the founders (Matthew Flannery) and have read many of the same articles Jonathan referenced. I suppose Kiva has the same opportunity for fraudulent activity as does any organization (American Cancer Society, Green Peace, 1st Reformed Associate Baptist Church of Des Moines, the Jiffy Lube down the street, etc.), but as Jonathan said the amount of publicity and attention they’ve received (and the microfinance institutions with whom they partner) gives them a great deal of credibility.

  10. I wonder who owns the property the “beach fales” are located on? I expect the property is worth WAY more than the fales.

  11. Eldergias says


    A traditional, established charity like the Red Cross? Considering the misappropriation of funds and the sell of donated blood at an extreme profit, I would trust a grass-roots charity over Big brother groups any day.


  12. You can pay with your credit card… so I loaned $100 bucks on my Fidelity 529 card… which means I’m effectively getting 2% interest on my money if it is repaid in a year… Just thought people might be interested in knowing you don’t have to use PayPal.

  13. Rich Minx says

    There’s a more direct means of investing in people through and you get a return through a percentage which you negotiate at the beginning. I haven’t tried it but I’ve heard good things.

  14. What is the typical repayment period?

    Deymond – I understand your concern about donating to a non-traditional charity, however, traditional charities tend to be bogged down by their established administration, which eats away at your initial donation. Kiva seems to have a direct path for the money to reach its intended recipient.

  15. “LOL? As a person who grew up in eastern Europe and just moved to US few years ago, I call BS! I love your blog, but this one is just so naive :-)”

    I have lived & worked in the Pacific islands for many years now (talking the likes of Tonga, Fiji & Vanuatu, not Hawaii!) and I must agree with Dima that this does sound pretty dodgy…

    However, it not impossible that this is legit (though most unlikely)… and incidentally Im going to be Samoa in a few months… so maybe Ill go and say hello 🙂

  16. Jonathan, I would have to agree with Dima. I moved from Ukraine to US several years ago myself, and visit relatives there every year. I seriously doubt that loans on the order of hundreds of dollars can make a difference in any business in Ukraine (the real estate prices in Kiev are similar to what they are in Boston, for example), and people who know what this “Internet” thing is are more likely to also know words like “carding” then “microloans”. 🙁

  17. Albrecht says

    Having originated from the Eastern Europe, I am going to second Dima’s post.
    100% repayment rate is just not plausible.
    3rd world people just don’t have the same luxuries we have here where, if something goes wrong, there’s a chance to
    try yourself in something else and rebound again.
    For the brave souls out there who decided to spring from the monotonous “getting by” on bare minimum, the chance of
    actually making it are worse than 50/50. Corruption, racketeering & extortion, more powerful and able
    (and intimidating) competitors, theft – all these factors add up to the risks.
    If an enterpreneur fails, how would he/she be about to repay? – There’s just no way to do that.
    Those people have no savings or channels to borrow from someplace else to repay the earlier loan.
    What, Kiva comes and shoots them for not having the funds to repay?
    Fishy and unrealistic to say the least.
    Donating to people directly is the way to go, without any expectations to get it back.
    No “feel good” “no interest” loans, but giving and forgeting about the money.

  18. My wife and I are going to Azerbaijan in June for Peace Corps, do you want us to look in on your loans while we are over there? 🙂

  19. Mark Rosner says

    this is great… i’ve actually spoken about microlending or microfinance in the past and its good to see that you’re actually doing it. kudos!

  20. The disadvantage of non-profits is the soundness of the projects they finance.Since they are not answerable to shareholders(donors) once they receive the money, there is no mechanism to find out whether the projects are beneficial which in a commercial(for-profit) world is measured in terms of Net Present Value(NPV).Though it is difficult to measure the NPV of some projects such as education where real benefits occur over a longer duration and are difficult to monetize, other projects benefits can be fairly estimated. This is where the for-profit charities such as Google Foundation(, Acumen Fund etc come into picture.They provide loans/funds at below market interest rates in addition to project/business support but the funds have to be invested in projects which are beneficial to people and commercially viable.Further, since the beneficiaries have to return the money they have to think through their proposals and have concrete plans.In addition this reduces corruption since the beneficiary has to repay unlike in the case of non-profits.

  21. I don’t know much about Eastern Europe, but a very basic example from Africa is:

    A woman receives a microloan for $20. She buys 2 large bags of beans and rice in a market. She takes the bags back to her village where she sells smaller portions to the villagers, she makes $30. She then pays back the loan and generally 25% interest, so $25. She makes $5. Her next loan is $15 and the process starts over.

    The fact of the matter is these microloans are repaid in full 97% of the time. Don’t get caught up in the misconception that because someone lives in the 3rd world means that they no nothing about business and survival.

  22. I think its sad the few charities/micro finance that have ripped people off have entirely turned a lot of people off the idea of doing this.

    Its like saying all corporations are corrupt after the enron fiasco.

    Micro finance is the way I usually go because I ama firm believer that the number one cure for social problems is a good economy.

    I think this video is proof enough that kiva is pretty legit…

  23. Jonathan,

    Dont you think that person who owns the beach huts is worth more than u? (if they sell the whole thing?)

  24. Mitchell says

    wow, lots of cynics.

    i haven’t put money into kiva yet, but it is definitely on my list of things to do.

  25. 😆 You guys are really making me want to visit Eastern Europe again!

    Microfinance has been around before Kiva, read about Grameen as mentioned before. In addition, there are even for-profit investments that deal in microfinance. So in general, I do not believe that microfinance is “BS.”

    On a local level, there is a lot of trust placed in these field partners. Some of these field partners also work with Grameen, some are longstanding NGOs, and some have lesser histories. I’m sure some shadiness is possible here, just like in charities in the US.

    I also agree that 100% repayment rates seem unrealistic. I always assumed that this was subsidized by the interest charged on the loans, so that all the money is still repaid to the lender. It’s certainly subsidized from somewhere. I have read that repayment rates have been much lower in areas of Africa hit by HIV/AIDS.

  26. What a great opportunity for scam artists who can easily make up stories and earn some good interest at an MMA, LOL!!!

  27. Eldergias, that is my point exactly…I would not donate to the Red Cross, but I am able to make an informed decision about that because the organization’s activities are well-documented.

  28. Johnathan, any other sites that accept Paypal and DO pay interest?

  29. Hugo Salinas says

    I second Mitchell…too many cynics…especially from first generation immigrants. I think there is a trend here.

  30. Elizabeth says

    What a great idea! I will start spreading the word and soak in their site, thanks for the tip, that will be a fun way to give.

  31. Jessi Hempel says

    Hey Jonathan – I’m quite positive Kiva’s projects are legitimate and the money is going to a worthy cause. I’ve written about the group a couple of times for BusinessWeek (I also wrote about you awhile back). I spoke with the entrepreneurs, investors, loan recipients on the ground in Africa. I toured their offices. I spoke with competitors. And I spoke with folks from Grameen. It’s smart, unusual work. And because they work with microlending partners on the ground in many locations, you can be sure the money is going to entrepreneurs who can both make good use of it and receive support in their endeavors.

  32. Great recommendation. Thanks!

  33. I’m suprised at the cynicsm in the comments. I’ve written about kiva myself, and have made “loans” through them. I think it’s great thing and like any charity could have it’s probelms, but here I’m willing to take a leap of faith based on the press I’ve come across.

  34. Check out this guy’s portfolio of entrepreneurs. He lended literally thousands of dollars. Here is one who truly believe in Kiva

  35. I’m very frustrated with Kiva. I made a loan on April 10. Pay pal gave me a receipt and my ccd has been charged..pp says it has gone through but kiva just keeps referring me back to pay pal and pay pal keeps referring me back to kiva. Grrr…I am glad it was only $25. This has been going on for a month and a half. Am I the only one?

  36. I just recently made four $25 loans through Kiva. I feel reasonably confident that this is as good or better a way to help than any other given the small amount of $ and relative ease of making a loan.

    I’m also sure that as Kiva becomes more well-known, it will attract more people who will attempt to take advantage of it.

    It will be interesting to see how it fares over the next several years.

  37. Kiva’s is providing a great service and I have supported them with $50 towards a $850 loan. The lender (me) will not receive the $50 back until the entire loan of $850 is payed back. Also, the loan funds will not be given to the requester until donations reach $850. Now, there is a $5 operational charge, loan interest rate (say 10%), bank interest collected while $850 is being raised and bank interest while $850 is being payed back. Kiva has many ways it makes money during the life of each ‘loan drive’. If you think about it, there can be millions of dollars in transition between loan receiver and donor, where interest is being collected. I made my donation in May 2007 and the loan was distributed June 2007. To date, 58% has been returned – at this rate it would take 2-years to pay back (two years of interest Kiva is gaining). I have requested kiva to open their operational records via their website, but they have not done so. This does not mean they will not, rather the person I emailed with was not the proper person to ask. This is important for all charities. I would like to believe Kiva is doing a good service, but I need to see more financial details.

  38. @Paul: Premal just spoke at a small get together at my firm. He stated that the lending partner fronts the money to the borrower. When the loan is completly fulfilled the money kiva has collected will then be transferred to the lending partner. In some cases they do a wash, because of the loan repayments from borrowers to the partner and the money kiva owes the partner for fullfilled loans from lenders. You also talk to operational and bank charges, etc. My understanding is kiva operational costs are financed by pure donations, from company’s, friends and the kiva lending community (optional for every lender). Any interest rate to pay back a loan by a borrower goes to the lending partner for their operational/admin costs I don’t think kiva sees a dime of this.
    Hope this helps?

  39. So who are the people on the ground handing out the money? Look at Kiva’s partners and select “Sort by Time on Kiva” :

    It’s interesting to note that those on longest often seem to have very dubious stats – either 5 star ratings with *0%” default and delinquency rates – how exactly are they achieving this? Or huge rates, or Closed or Paused status. Take for example the “Shurush Initiative” in Gaza to whom $5000 was lent – now they have a 57% default rate and Closed status. Or “Prisma Microfinance” in Nicaragua and Honduras where more than $450,000 has been lent with no defaults/delinquency – but now their status is “Paused” – it looks odd then that kiva doesn’t publish the percentage of the cash has actually been repaid. 0% default/delinquency in 26 months is surely too good to be true. How are they finding the funds to keep their rate at zero? Can we believe there is no corruption involved?

    I am an optimist however – microfinance is clearly such a good idea, now even major banks want to get involved. The big question is how to fight corruption to ensure money isn’t funneled (even indirectly) into undesirable areas such as arms or drugs or the wealthy military classes in some of the more divided countries.

  40. Look, guys….send them $100 and wait until it is paid back before complaining. 50 million people in rich countries lending $100 will wipe out poverty in the world….
    If it is a scam, you lose $100. Big deal.

    Me- I am getting my $50 loan paid back regularly from Kiva, next week I will send them $500. After that is paid back, I will go to $5000. I also plan to lend to which will pay 3% interest to me. There I will put $5000 by next year.

    Please don’t be negative…you are turning a lot of people off permanently from helping.

  41. hejustlaughs says

    People need to do a little more research before calling Kiva “BS”. When I was broke a year ago I could only afford to loan out a couple of $25 loans as a test and they were all paid back 100%.

    I’m doing better days and I decided to make it my goal to fund $4,000 worth of loans this summer and I recently passed the $3,000 mark so I think I might just hit it. We’ll see what happens with the next couple of summer job paychecks.

    The loans are not tax deductible but my income is less than $15,000 a year so it’s not a big deal.

    I always believed you should live life by example. I’m 21 years old. Instead of all the BS kids spend the money they make on these days I’ll fund $4,000 worth of loans. I do agree with Jonathan on the part there it seems your money can go a long way with Kiva. Every time a loan is paid back it can be re-loaned, over and over again.

  42. Hejust, good luck on reaching your lending goals, but I’d caution that people also need to do research before declaring that Kiva is “not BS.” Having success with $50 is not the same as having success with $4000 (an organization like Kiva could easily target small loans towards less risky borrowers, if they are so inclined).

  43. I have loaned money through Kiva and the money is gradually being paid back. All well and good, however I have problem with who validate the field partners claims. Check out field partners in Cambodia! The claims regarding the local money lenders interest rate varies wildly between field partners from 43% to 120%! Why should the local money lenders interest rate vary this much, or is it just coincident that those field partners which claim the highest local rate charge their customers over 3 times more interest than the field partners claiming lower local money lenders rates. Coincident or are some field partners profiteering on the back of peoples goodwill?

    I have emailed Kiva 4 times regarding this, written a snail mail letter to Matt Flannery (CEO) and even phoned the San Francisco office from the UK but after 6 month – Not one reply.

    If Kiva system can’t validate their field partners claims then what else don’t they know about how the field partners operate.

    Don’t get me wrong the idea is brilliant but the current system has flaws. Until these flaws are address I can’t continue to support or recommend Kiva any further!

  44. So much complaining and doubt. Can’t you each take a “risk” and let a mere $25 to somebody? Its certainly worth it knowing you’d be helping a person in need. Not everything is a scam and I would never trust big organizations like the Red Cross or Catholic Charities.

  45. My sister spent many years in Indonesia and believed in the validity of this organization’s work. Sure, it’s always possible there’s some corruption. If you’re the kind of person who is unable to trust anybody, then donating your time to a charitable purpose like working with kids or the elderly might be the better thing for you, but microcredits have been shown by a large body of research to work. That’s why people are getting Nobel prizes off the idea. We also know that administrative costs of traditional charities can eat up half or more of your donation, and we risk the ‘drop in the bucket’ downside with some causes or groups if we can in fact only afford to donate a small amount. Kiva is designed to overcome those disadvantages as well as possible.

  46. check again, kiva’s own website says that their lending partners charge up to 21% INTEREST. Not a bad potential rate of return for “free” money.

  47. “check again, kiva’s own website says that their lending partners charge up to 21% INTEREST. Not a bad potential rate of return for “free” money.”

    This is all correct, Kiva’s lending partners can charge up to 30%. But if you take a closer look, they also give you info on what the average interest rate is for a non-kiva lender (a regular bank, etc) in that region. Its normally in the 80%-120% range. If my giving will enable an organization to give a 21% loan to a person who would have normally gotten a 120% loan, then so be it.

    On a side note: If you want some of that interest, look at or (or if you are outside the US, They allow lending, and you get the interest returned to you as well. Its not microlending, but P2P lending.

  48. I have received some of my money back and so have my friends and relatives. Who cares? This organization takes OUR money and then gives it to supposed “NGOs” (who are supposed to be nonprofits) to distribute to the borrowers. However, the “NGOs” charge the borrowers lending fees and interest on OUR money. It is OUR money. If we wanted to charge interest, then we would, and we would get the interest. Instead, the poor borrowers have to pay the interest and fees to the “charity organizations” that distribute OUR money, and the “charities” keep the interest and fees. Screw that. I am getting out of this racket now.

  49. What bothers me is that many of these loans are being paid back within a couple months of the disbursal date – well ahead of the loan repayment schedule. That makes me think that the lending partner is continuing to charge interest to the borrower for the original payment schedule while using new funds that come in to pay off the loan, keep the default rate at 0% to encourage re-loans and gain new investors to add to the growing amount that can be lent. That would mean that they could find any sort of project without having to worry about the ability of the borrower to repay principal since new funds are arriving by the minute, and the lender can focus on collecting interest…

  50. You first have to decide why you are making your contribution (loan). If you incentive it to get a return on your investment (financial gain)from loaning to poor people then Kiva is not for you. Not everything in life, including giving out loans to poor people, should be seen as a money making venture.

    If you main goal is to help struggling people in third world countries obtain loans to keep their farms, small stores, fishing boats, cattle, through micro financing, which they could not obtain any other way, then Kiva is a great way to help out.

    If people think paying 15% interest is so bad through these Field Partners, then they are no looking objectively at the alternatives these people have. I have been to the Philippines many times and seen the loan sharks in action, and believe me this is a much better alternative. There is a difference between charging an interest rate which offsets the cost of defaulted loans v/s charging people 200% interest just because you can get away with it.

    Since this blog has started Kiva has gained a lot more positive reviews than negative, and they have my full support. I have loaned out $100 to start and my loans are already being paid back. My friend has been reloaning his original $100 for 2 years and has already loaned to 12 different people.

    Of course you will always have the folks that find any reason to knock a place like Kiva, but these are usually the same people that make snap judgements about everythiing. I am glad I did my research before staarting my loans, and went into it with the right intentions. That is to get personal satisifaction out of giving something back.

  51. If you’re concerned about the legitimacy of the Field Partners on Kiva, you can review their credentials at: .

    MIX Market is a multi-national clearinghouse that rates and publishes data from thousands on microfinance organizations.

    Here’s an example, Normicro (a Kiva partner), a Norwegian that lends in Azerbaijian:

  52. I heard about Kiva through the Leadership Summit at my church. I have been researching it a little bit, and my main reason for wanting to lend through Kiva is to be a good Steward of the money I have been blessed to make. I would loan with the understanding that I won’t get it back, therefore if I do get it back, it’s a good surprise then I can re-lend it to another person.

    The part I don’t like is its sold to us as a 0% to the entrepreneur when they are paying interest to the loan officer partner in their area. The other part I don’t like is most of the loan partners disperse the funds to the entrepreneur before they even list it on Kiva. Therefore they lend money at a certain interest rate (maybe 18% when the local interest rate is normally 30%) and then within 2 months they get all that money back from the nice lenders like us through Kiva. So for the rest of the loan, they make all the interest, without any risk at all since the know it will most likely get funded through Kiva.

    I am not wanting to get any interest, but I would really like a way to lend to these people and have them get a true 0% interest rate like it’s sold to us as.

    Thoughts or comments?

  53. The interest is used to pay for labor, overhead, marketing, and other various costs. Nothing is free. You won’t find any charity that doesn’t retain some portion of their revenue for operations. How would charities make themselves known without marketing or if it’s their full-time job, how would an employee afford the cost of living? etc. etc.

  54. KIVA is an absolute scam. My daughter and I spent hours selecting just the right 3 people to “loan” money to. We get regular updates. All fiction. This reads just like Madoff.

    They DO NOT loan money to individuals. This is a major lie on all their public front information. The CEO dismisses this lie as minor; “its highly imperfect, but like a 3 1/2 year old child:it has a lot of potential”. For my money, they are proven liars, and if they lie about this, when are they telling the truth?

    They committed fraud on my daughter (and fooled me – I should know better). We are attempting to get money back – so we can direct it with certainty and not thru just another Internet scheme.


  55. I like the Kiva concept. I have given a donation of 50 $.

    What I don’t like is the exhorbitant interest rate… 30% to 35 % interest rate is way too high in my view…. something like 5%-10 % would be more acceptable . We are talking about poor people here. We need to help them as much as possible. Non-Profit organization in my view is for non profit. Asking 30 to 35% interest rate is a profit deal in my book . Saying that the cost of distribution and risk are higher in developing countries might be true but 1$ there is often worth 10 x the value of the local currency. So the extra buying power of the exchange rate should be able to cover this extra risk .

    Taken from Wikipedia:
    “Some people, including microfinance pioneer Muhammad Yunus, argue that the interest rates of many microcredit institutions are unreasonably high. In his latest book[16] he argues that microfinance institutions that charge more than 15% above their long-term operating costs should face penalties.”

    I would like to find the same concept than but were they charge very little interest rate to the borrowers. Just enough to cover the cost of doing business and pay for some of the defaults that might occur. Anybody knows of an organization like that ?


  56. I liked the Kiva concept too–until the truth came out that the three loans I made did NOT go to the three people I selected. As long as Kiva posts individuals for you to select who are already fully funded, Kiva is guilty of false pretenses. I thought they were cleaning up their program, then I saw a TV ad this week that still implies that you get to pick the actual person you lend to. Lies, llies.
    I have been trying to get my three loans back. I have been asked to provide a time when management can call me. I’ve sent them 6 different emails each ith days to call me…and I haven’t even received an email response. It’s looking shadier all the tme.
    I’ve given them 2 months to be straight with me, now I’m reporting my eperiences publically. I won’t lend (or donate) to Kva again. There are legitimate programs that do honest work.

  57. Lorna, how do you know that the money didn’t get to their intended borrowers? Did you physically go there to find out? I am thinking of donating through Kiva and would like to know the good and bad about this organization. If you could shed some more light on your issue with them, that would be great.


  58. I guess my concern was that each time you loan someone some money and each time you are repaid that loan they ask for 5% or 10% for expenses. I’m sure there are expenses involved in moving the money around, checking to see if a person really needs a loan, etc. but it bothers me that no one seems able to substantiate that the money ever went to anyone. A loan I made was for someone wanting to increase the inventory in their little store. I got the money back in about a month. How can you increase your inventory, increase your business and keep your inventory at a new higher level with a one month loan?

  59. OK – I am looking into these guys as well – especially posting about them on my facebook ! It seems legit – the link below details sponsorship by some pretty big players

  60. I have worked in Malawi and Tanzania for the past several years and thought that microfinance interest rates, in general, were appalling. But now that I have started a business myself in Malawi, I see that the cost of operation is extremely high. Without money, there is no mission. The interest rates that MFI’s charge pay for admin costs yes, but they also pay for the trainings that participants often receive. I now understand why the interest rates are high and while I do think that there might be some organizations taking advantage of poor people, I don’t think that they all are. My brother has been pretty happy with the loans he has made through Kiva and now my fiance and I are thinking about asking for people to make loans in our name as wedding gifts. It is a nice way to make the money work twice and if we don’t get all of the money repaid then we will consider it a donation.

  61. I’ve been using Kiva for about 8 years now. I currently have about $300 in loans outstanding. This is an amount that I have worked from all of this time. I loan $25 at a time, sometimes letting my kids pick out who to loan it too, when the $25 is paid back, I reloan. EVERYONE that I have loaned money to has repaid. I hope that it is doing as much good as I think it is!

  62. HKGKitty says

    Kiva is new to me. I hope my money can really help those who need it.

  63. anyone with more recent experience?

  64. Sheldon Collier says

    I’d like to say something about the interest rates charged by Kiva. I’ve personally lived in a 3rd world country where people have to borrow money at 10% – 20% per month, yes per month. On top of that, they would have to use the deeds to their homes as collateral. The Kiva loans are a much welcomed alternative, despite the fact the interest rates may seem excessive by Western standards.

  65. You didn’t mention the huge interest on the loans that the finiancial institutions are charging those poor people. The average loan interest that those financial institutions charge is 23%!
    This is unfair. How can you loan a poor person 100 dollars and expect them to pay the financial institutions back 123 dollars (or more!!) ?

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