Microfinance is one of the hot trends in social enterprise right now. Microfinance organizations issue small “microloans” – sometimes as little as $25 – to entrepreneurs, most often in the developing world. Many of these entrepreneurs do not have access to traditional forms of capital. These loans enable them to start or expand a business, helping the entrepreneur lift him or herself out of poverty.
One of the fastest-growing microfinance organizations is Kiva Micro Loans.
How It Works
Unlike many other microfinance organizations, Kiva does not make loans itself. Instead, it partners with other microfinance organizations, called Field Partners. Kiva’s Field Partners make and disburse microloans to individuals and groups in their country of operation. The Field Partner then uploads borrower photos and stories to Kiva, where volunteers publish them to Kiva.org.
Once the profile is published to the website, lenders can start funding the loan. They can fund anywhere from $25 to the full loan request. When the loan is fully funded, Kiva disperse the money to the Field Partner, which uses it to replenish the money from its earlier loan to the borrower.
As the borrower repays the loan, the money is repaid by the Field Partner to Kiva, which repays the lenders. Lenders can either withdraw the money from the repaid loan, donate it to Kiva, or use it to fund another loan.
How Kiva Uses Social Media To Fight Poverty
Kiva has made extensive use of social media marketing to build its community of lenders.
In fact, Kiva is one of the most successful Web 2.0 organizations, combining a charitable purpose with social media features that encourage member participation and build a sense of community. Like many traditional social networking sites, Kiva lenders have a public profile displaying select information about the lender, as well as invite-a-friend features.
One of Kiva’s most popular social media features is the Teams feature, which allows Kiva members to join “Lending Teams” organized around specific interests or affiliations. This not only encourages a spirit of community within groups, it also encourages a spirit of friendly competition between them, resulting in loans filling faster and keeping interest levels in the site high. For example, there is an ongoing friendly competition between the two top Lending Teams – “Atheists, Agnostics, Skeptics, Freethinkers, Secular Humanists and the Non-Religious” and “Kiva Christians” – that has resulted in a combined total of more than $3,500,000 loaned by these two teams alone!
Many of Kiva’s lending teams are centered around universities and other educational institutions, and Kiva is reaching out to college and high school students even more directly with its Campus Kiva and Kiva High School programs.
The most devoted Kiva lenders have even created their own community, an unofficial forum called Kiva Friends, which now has nearly 6000 members and more than 80,000 posts.
How You Can Help
The easiest way to help is to sign up and make a loan! You can filter available loans by factors including the gender of the recipient, the country where he or she lives, and the business sector he or she works in.