Kiva Brings Non-profit Microlending Model To U.S.
Jun 10th, 2009 @ 10:30 AM by Ben Meyer
When banks tightening credit in the last year, small businesses have had to struggle to get financing. Enter Kiva.org, an innovative Silicon Valley non-profit that has garnered plenty of buzz and goodwill microlending to poor entrepreneurs in the developing world. Kiva will now begin a pilot program in U.S. to allow individuals to make small loans to low-income entrepreneurs.
Kiva facilitates peer-to-peer lending by citizen lenders to very small, often very poor entrepreneurs, by vetting the businesses and and tracking the payment histories. Kiva loaned $4.5 million in April alone and has given out $75 million to 180,000 entrepreneurs since launching in 2005. According to Techcrunch, the recession and change in lending practices in the U.S. made the need for Kiva’s services here.
Kiva’s non-profit model means you cannot earn a rate of return on loans you give out; the best you can do is get all your money back. But to me, when comparing a loan to charitable donation, it makes a ton of sense. Help without dependancy. Apparently Forest thinks so too: Tom Hanks plans to lend to micro-businesses through the program.
Ben Meyer is the Editorial Director of Loan.com
I’am in need of a personal loan.I live in Virginia.