Few days ago I gave my 100th micro credit with Kiva. This particular credit went to Philomene:
“Philomene is 48 years old, married and has five children, ages 8 to 19. Her husband is a builder. She wants a loan to buy more fruits to sell, such as yellow bananas and passion fruit. The profits from savings will be used for paying children’s school fees.”
The idea is very simple: giving micro credits via internet to small entrepreneurs in developing countries. Kiva facilitates the process establishing a website to channel the funds and creating network with local organizations which will disburse the money and collect repayments.
Since what you give is a credit, when it is paid back you can re-lend the money, thus, the same 25$ may be used by several entrepreneurs along the years. See my case:
The fact that I have given 101 credits of 25$, doesn’t mean I have dedicated 2,525$ in these 4 years. I have dedicated to Kiva just above 550$. With them I was able to lend and re-lend up to above 100 credits. Now I still have close to 400$ in outstanding credits (being re-paid), after having donated some 130$ to Kiva to help with their operating costs and having lost just 28.19$.
I want you to take a second to think what do those 28$ lost mean. The default rate along these 4 years in my case has been 1.5%, this is close to nothing. Take into account Western countries mortgage default rates: close to 10% in Spain, and though lower in USA it reached over 5% a few years back.
Of all the loans that should have already been paid (75) just 3 ended with a loss. In one I lost less than half of the 25$ and in other 2 thirds. The entrepreneurs came from Africa and I am not upset by not having gotten back 28$ from them. I just hope that their situation improved since the time they were forced to default. With the 3rd credit which ended in loss, I lost 0.06$… due to currency exchange, meaningless.
Do you want to know some more statistics?
See below a map with coloured countries being the ones in which a recipient of one of my credit lives:
- In 67% of the cases the recipient of my loans are women (see Forbes article about higher ROI when investing in women).
- The countries in which I have given more credits: Peru (see the story about one of the entrepreneurs there that I visited), Uganda, Kenya, Rwanda, Philippines, Pakistan…
- Regarding sectors: agriculture takes 30.7% of my credits, followed by food (22.8%), manufacturing (13.9%), retail (10.9%), education (6.9%)… (I would like to give more credits for education, but within Kiva there are not so many displayed; to cover that need I collaborate with another organization, Vittana).
- I told you that I was introduced to Kiva by a friend. I also sent many invitations and some gift cards to friends; 6 of my friends accepted them.
These were my first 101 loans. Loans that change lives…