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Long tail philanthropy through Kiva.org

A year ago I learned about Kiva.org, a startup that makes microfinance loans to entrepreneurs in poor countries. Sometimes a loan of just a few hundred dollars is enough to help poor entrepreneurs start a new company that becomes self-sustaining and lifts them out of poverty. Full repayment of the loan is expected.

Last December I decided to try it. I sent in $25, which was pooled with the money from nine other people to provide a $475 loan to Lina Martinez Hernandez of Mexico. Lina is investing the money in her own restaurant. To date, Kiva has had a 100% repayment rate, and I thought I’d couldn’t lose anything by sending $25.

Since then, I’ve received notice of two repayments; Lina has repaid 50% of her loan. I don’t doubt she’ll pay back the loan completely, and I haven’t missed the money in the meantime. Someday I’d like to eat lunch at her restaurant.

Jeff Lindsay recently wrote about gambling on people, an idea that came to him after watching the story of Chris Gardner in The Pursuit of Happyness.

“In his moments of crisis, and in the lives of many I have known, a small amount of cash freely given could have made the difference between disaster and hope.”

I like what Kiva is doing. I think it could be called long tail philanthropy. Just as the Internet has facilitated the creation of many niche markets, it also brings purpose to a $25 loan that would otherwise be insignificant.

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This entry was posted on Monday, April 9th, 2007 at 6:19 pm and is filed under Internet, Main, Philanthropy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

6 Responses to “Long tail philanthropy through Kiva.org”

  1. Carolynn Duncan Says:
    April 10th, 2007 at 11:15 am
    I like the Kiva concept. Do you know, what are they doing to educate the borrowers about solid business practices so they can leverage the funding & get their businesses properly established?

    Here’s another interesting idea– community-owned businesses.
    http://www.newrules.org/retail/news_archive.php?browseby=slug&slugid=162

  2. Ash Says:
    April 11th, 2007 at 9:29 am
    Nicely done Richard. I read about his last year as well but like so many other things I just dropped the ball and never invested in someone. I love the idea here and I’ll try to get involved right away.
  3. Stacey(Stucki)Eaton Says:
    April 11th, 2007 at 9:47 pm
    Richard! :) I have stumbled across your blog, and after reading ten or so before yours, I finally got here and am blown away by how smart your “stuff” is. I have always thought you were a brainy-boy. Good job.
  4. Richard K Miller Says:
    April 11th, 2007 at 10:28 pm
    Carolynn: Kiva doesn’t actually administer the money. They give it to established microfinance groups that probably have varying degrees of business and accountability training.

    Ash: Hey, good to hear from you. Let me know how it goes after you’ve done it.

    Stacey: Hi! I’ve been reading your blog too and I’m quite entertained by Tyler’s antics. Thanks for your comment too. Very nice of you. Tell Nate and Tyler hi for me.

  5. Rickety Says:
    April 18th, 2007 at 7:57 pm
    After reading your experience with Kiva, I went ahead and made a loan today. Thank you for taking the time to explain how it works. I always wanted to be a banker that charges no interest. :)

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