Poverty Eradication

You don’t have to be a millionaire to make a difference. For $25, you can get four collector's stamps, 25 moving boxes, or a Care Bear cuddle pillow on eBay. Or you could help Maria, and get your money back within the year.

Every day for five years, Maria has sold sandwiches on the street near her home in Saltur, a bustling village in northern Peru. If she had a food cart, Maria could sell hamburgers too, and make enough money to help her two children to continue their education. But she can’t afford one.

Then, she asked for a loan of $175 to buy a cart on www.kiva.org. A few hours after her plea appeared, Maria had secured the loan from small sums lent by people in the United States, Canada, France and Britain, who were touched by her story. The plan is for her to repay them within 13 months, and to send regular progress reports until then.

Kiva, is a website, a peer-to-peer on-line micro-lending nonprofit organization, is changing the dynamics of microfinance by linking people who have money to loan up with entrepreneurs in developing countries who need some capital, all over the Internet. What is considered pocket change for many people in the United States can go a long way toward helping a struggling businessman get started in another part of the world.Matt on the right side, the Founder of Kiva [Photo: Kiva Fellow Blog]

With Omidyar Network’s support, Kiva develops its technology platform, expand its network of field partners, and invest in its due diligence and monitoring capabilities across its growing portfolio.

Like MySpace or Facebook, Kiva functions as a community, so you can browse through profiles of other lenders (complete with photos, hometowns, philosophies and portfolios) to see who’s involved with what. The site’s Journal section offers progress reports on the entrepreneurs (and their repayments) as well as recommendations. Then you can pick a business to help finance.

They are Matt and Jessica Jackley Flannery, who founded Kiva. What makes Kiva different from other micro-lenders? “If you have $10,000 to lend, you have many options,” says Matt.  “If you have $25 to lend, this is the only option.”

In a sense, kiva began with the Flannerys’ love-at-first-sight meeting. In 2000 both attended the interfaith National Prayer Breakfast in Washington, D.C. Jessica was a senior in philosophy and political science at Bucknell; Matt was about to get his Stanford bachelor’s in symbolic systems and then a master’s in analytic philosophy.

Kiva's Cycle: How Kiva Works [Illustration by Kiva]Like almost everyone in the microfinance field, Flannery is inspired by Nobel Prize winner Muhammad Yunus through the Grameen Bank, giving credit to struggling cottage industries without collateral in Bangladesh.

Since launching in 2005, Kiva has attracted more than $20 million in loans from more than 100,000 people. People choose whom they want to lend to. They can loan from $25 to $150 per entrepreneur, although recent demand to loan has forced the site to cap the loan amounts to allow more people to participate. The site gets money to grow from loan percentages donated to it by individual lenders.

Under such circumstances, it’s fun to lend money. Matt goes farther: he says this kind of philanthropy can become an addiction—although “most people feel like it’s not a donation; it’s a weird in-between.” Because they’ll see the money again, he says, “People feel good about that—it’s there if they need it.”Jessica Flannery, Co-founders of Kiva [Photo: phorecast.com]

Whatever its role fighting poverty, Kiva is transforming philanthropy. “We hope we’re giving the feeling of being part of a community,” Shah, the President of Kiva says, as quoted in the Stanford Magazine.

Kiva’s approach brings to mind a popular parable derived from a Loren Eiseley story. An older man saw a young boy walking along the ocean at low tide. The child was eagerly picking up beached starfishes and flinging them out to sea. “Son,” said the older man, “every day there are hundreds of starfishes stranded on the beach at low tide. You’re never going to make a difference.” The child lifted another starfish and threw it out to sea. “Made a difference to that one,” he replied.

Jessica and Matt Flannery, Premal Shah and their Kiva colleagues are out to change the world just that way. One by one. [From various resources]