Tag Archives: NGOs, non-profits, charities

My 100th loan with Kiva

Few days ago I gave my 100th micro credit with Kiva. This particular credit went to Philomene:

Philomene (image from Kiva).

“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.”

I got to know about Kiva from my friend Bruno at the end of 2008. I immediately liked the idea and I gave my first loan through it soon after, in January 2009.

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:

Loan count since 2009.

Loan count since 2009.

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:

My "Lending by Country" map.

My “Lending by Country” map.

  • 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

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Bill Clinton endorsing Kiva (video)

Some months ago, I gave a loan through Kiva to Fizuli Agdjabayov, a man who has a small transport business in Azerbaijan. Yesterday I got an email with the latest post of one of Kiva’s blogs about a visit of a Kiva fellow to Azerbaijan.

I especially liked the two videos that Yelena Shuster, the fellow, had prepared about her visit. I immediately thought about sharing these with you through the blog; this is what I am doing with this post. Enjoy the video:

I believe that seeing these fellows visiting the entrepreneurs in person is the best way to gain confidence about this system. By chance, on a trip to Peru, I could visit as well an entrepreneur that had received a loan through Kiva; then I wrote about that experience in a previous post in this blog.

The second best way to gain confidence on initiatives like Kiva is by seeing Bill Clinton endorsing them in an interview. I came across the following video while watching Yelena’s, in it Bill explains how Kiva works:


Filed under Helping others, Investing

I am an angel

Last 23rd March the three Toastmasters clubs in Madrid organized a gathering at Hard Rock Cafe. The event was a great success with over 40 people attending it. John organized it including 3 prepared speeches, a book review, some table topics and an improvised theatre!

I gave a speech which I had created over a year before. That was my 9th speech in the way to obtaining the Competent Communicator award of Toastmasters. The objective: “Persuade with Power”.

I first gave this speech titled “Angels” on the 4th of February in 2009. Then I used it again for the Area spring contest and again in the Division conference in Lisbon that same year.

With some slight modifications I gave it again in the gathering. This is its script and more or less what I said…

“Do you believe in angels? I do. I do believe in angels. What if I tell you that I am an angel? Wouldn’t you be curious? Wouldn’t you like to hear about it? You will.

I believe in what are called “business angels”.

I guess that most of you have heard the term “business angel” at some point. For those of you who haven’t: business angels are investors who invest part of their money in small and medium start-up companies, helping entrepreneurs to set up their businesses.

In this speech I want to persuade you to become business angels. You may tell me “Javier, I don’t have a spare million to invest in companies”; neither do I.

Do you think that to be an angel… to help someone to start-up with their business, a lot of money is needed?

Microcredits are small loans given to the poor, to those entrepreneurs who lack collaterals and a credit history; this makes them not eligible for the traditional credit given by banks. We are talking about someone in Vietnam who runs a grocery shop or about Mariano Choque who makes handicraft in Peru and whom I met last summer in a trip to Peru.

Microcredits are generally considered to have originated with the Grameen Bank created by Muhammad Yunus in Bangladesh more than 30 years ago. It all started as a research project to examine the possibility of designing a credit delivery system to provide banking services targeted to the rural poor. For this contribution, Muhammad Yunus was awarded the Nobel Peace Prize in 2006.

Ok, this is the theory. Now, I told you I was an angel; do you think I am part of that Grameen Bank in Bangladesh? No, I’m not.

Today the internet has facilitated very much the process. Kiva.org is a US non-profit organization which links those poor entrepreneurs, in developing countries, with us, here in Europe.

Kiva presents us with a list of individuals who are requesting an amount to start or improve their business. There you choose in which project you want to invest and how much do you want to invest. Kiva was started in 2005, and now counts with over 600,000 users who have given credits worth over 120M$ to over 320.000 entrepreneurs.

What it’s more… think of this for a moment: we are talking about credits and not donations; this means that you will get the money back! Say you invested 100$; when you get them back what would you do with them? You can lend them again! Imagine how many people you can help with those same 100$. Isn’t it wonderful?

Let’s see possible concerns you may have:

  • Is Kiva profiting from it? No, as I said is a non-profit organization. Like Toastmasters. Of course, Kiva has operating costs, but these are covered with different donations than the money you lend to entrepreneurs.
  • How do we know the money reached the entrepreneur? Kiva works with several field partners who are the ones scouting the entrepreneurs, uploading the information about them and their projects and finally handing them the money.
  • What if the loan is not repaid? Indeed some loans are not repaid. Around 2% of them. To avoid this Kiva is classifying the field partners. They classify them according to the level of risk of the credits already given to entrepreneurs presented by the field partners. But then again… with investment in the stock market, what would you do to avoid losing your investment: you just diversify!
  • If you have more concerns or questions about the topic you may ask me after the other speeches.

As I said at the beginning, I believe in angels. I am an angel. And what is more important: each of one you here can give a loan that can change a life… each of you can become an angel.”


Filed under Helping others, Investing, Toastmasters