also loans to the US

Thursday, June 18th, 2009 @ %I:%M %p | Life

kiva-logo1.gifFor those unfamiliar with Kiva: Kiva’s mission is to connect people through lending for the sake of alleviating poverty. It is the world’s first person to person micro-lending website, empowering individuals to lend directly to unique entrepreneurs around the globe. I wrote about Kiva before: You should join.

Recently Kiva added the US as a region from where requests for loans can be submitted. I noticed this when I checked into the website a while ago. It surprised me. Upfront this country didn’t appear to me as a target for an organization like Kiva. In Kiva I am a member of the Lotus team. There a discussion started on the merits of this event. This blog entry attempts to capture my thoughts.

Of the eight loans I am currently participating in seven are to the continent of Africa and one to Asia (Cambodia). For entirely subjective reasons I focus on Africa. I feel that this continent almost as a whole is severely challenged in joining in the world economy, provide prosperity to its inhabitants. As said this is entirely subjective, you may well argue otherwise and I may well not have rational, logical arguments to counter you. I am mainly including this here for personal context.

As is correctly mentioned in our team’s discussion, all of us decide for ourselves who we loan to. Thus the short answer to the issue of US loans is: “well then, if you don’t like it don’t put your money there.”

But for me that is not the whole answer.

While I certainly decide for myself who to loan to, I do feel that the course that Kiva itself takes does have influence on how effective and appropriate my, admittedly small, contributions are within that larger scheme. I don’t want to deny that any fellow inhabitant of the US is deserving of support for personal initiative. But it does seem to me that there are many more avenues available to that person than, in my context, a farmer in Cameroon. I do realize that I am in the higher sections of the economy and so I may have more options to pursue my initiatives than average but still almost all of us will have collateral in one form of another that can be used towards securing more traditional funding for our initiatives than are accessible to that farmer in Cameroon.

I just took a quick glance at some of the request for loans from the US. I see amounts of $7450, $10000, $5750 and $9000. I can’t help but grinch when thinking what impact Kiva can have with those amounts in third world countries.

The question for me is does including the US open up the reach of Kiva, bringing in new lenders that otherwise may not have joined? And these having joined will they then also loan to initiatives in third world countries? I don’t know. I hope that the Kiva organization does have the spill-over effect in mind and is strategizing to make it happen as much as possible and evangelize to these loaners the other regions of the world.

At the same time I do not want to dictate to anyone who to or where they should loan to. To me that freedom is one of the key characteristics that caused me to join Kiva. At the same time I am uncertain about the necessity of Kiva’s involvement to microfinance US initiatives. So perhaps my conclusion and advice to Kiva is: tread carefully.

All this notwithstanding. Kiva is a fabulous initiative and you should join us. You can make loans of as small as $25. I know of no other effort where you get to decide where exactly and to whom exactly your contribution, all of your contribution, goes. I joined about a year ago. I have made, or rather participated in, 8 loans so far. Two of them have been repaid and I re-contributed those funds to other loan requests. It will give you great philosophical satisfaction to participate. If you have questions please email me:



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    2 Responses to “ also loans to the US”

    1. Mama Muis Says:

      Hi, You express so well what I feel about the subject. The giant amounts, the options for a lender in Africa versus usa or western europe f.e. I really have to get used to the idea.
      greetings, a fellow -still very enthusiastic – kivalender from Holland (and yes! everyone should join kiva!)

    2. Sam Says:


      Thank you so much for your input regarding Kiva’s new domestic microlending program. I applaud your embrace of choice amongst Kiva lenders. Working for ACCION USA, one of the two Kiva field partners operating in the States, it’s wonderful to notice people writing about domestic microfinance. Unfortunately, Kiva has been receiving a lot of flak lately for their decision to begin facilitating loans to local entrepreneurs. Too often, this criticism stems from a misunderstanding of domestic microfinance—its mission and its mechanisms. AUSA believes passionately in the value of small business and accessible credit, having offered domestic microloans now for over a decade. With the ability to enrich communities, empower individuals, and increase economic opportunities, small businesses constitute a vital sector of our economy. Our partnership with Kiva has been exciting. Not only has it attracted new applicants and buoyed interest, but it has spawned a meaningful debate about the purpose and applications of microfinance.

      One common criticism of Kiva US lending program is that it will draw funds away from needier foreign borrowers. Yet a recent report from Kiva indicates that lending has ballooned since they announced the support of domestic loans on their platform. Such loans do not take place at the expense of foreign borrowers. Moreover, by permitting loans to US microentrepreneurs, Kiva has allowed AUSA to provide access to credit for many poorer individuals who would have otherwise been without financial resources. Credit has always been scarce for small business owners, but with the financial crisis in full swing, it has all but evaporated. Granted, domestic borrowers might have higher incomes than “competing borrowers” in the Third World. But, as Kiva wisely acknowledges, poverty is relative, and income deprivation is only one component.

      If you’re curious about the specifics of Kiva’s domestic lending program and the rationale behind it, please visit their blog. To learn more about ACCION USA’s operations, I’d encourage you to check out some of our resources online. In addition, you should feel free to follow our blog or our twitter account (@ACCION_USA)!

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