Thoughts on Kiva now lending to the US
Jun 23rd, 2009 | By Ridz | Category: Other People
As you might have noticed, I’m quite the supporter of Kiva these days. In fact, I even pitch Kiva to the non-profit reps who are on the street soliciting donations.
My pitch? “The same $5 lent to someone in a developing nation would probably make a larger impact than here in Singapore.”
But recently, Kiva’s extended their support to borrowers within the US. When I found out about it, it was through this group that was set up on Kiva. Here’s part of their description:-
We are really, really angry that Kiva is now making loans to US borrowers. By including borrowers from the USA it has undermined the very core of what made it so unique and special; impactful contributions to impoverished people in developing countries. Money lent to US borrowers is money that CANNOT be used for borrowers in the developing countries….which previously was the whole idea behind Kiva. Kiva’s stated mission is to “alleviate poverty”. Poverty is defined as: ‘the state of having little or no money and few or no material possessions’. Does that sound more like the situation for US Kiva borrowers or borrowers from the Third World countries? Now the truly impoverished are being asked to COMPETE for funds with borrowers in the US. The US is the wealthiest and most resource-full nation in world history. To think that we are asking lenders from the US and around the world to even consider lending to the US is a shameful, disgraceful decision. There was a recent Kiva loan request from a US man with a four year college degree in architecture and many years experience in that field. He decided he wanted to do something different and try his hand at website design. He was looking for $7000. He got it…….so that’s $7000 which previously would have been available to 7-10 other borrowers in developing countries. That’s why we think including US borrowers is a bad idea. Shameful, shameful deviation from Kiva’s core mission. Yes we know, we don’t have to lend to US borrowers, and we won’t. And we ask that YOU consider not loaning to US borrowers as well. Further we think it is unconscionably for Kiva to set the stage whereby the truly impoverished third world borrowers must now COMPETE with US borrowers for Kiva funding. And Kiva management has the idea to take US lending to all 50 states.
(source)
My reaction when I read it was, “wtf? Why are they lending to such people? I do agree that the power to make a loan is still in the hands of the lender but to even list such people?”
But it was only several days ago that I went to the Kiva site to actually read more about their decision. And in their FAQ I saw this:-
Why does Kiva lend funds to entrepreneurs in the U.S.?:
Kiva is a global organization and seeks to provide working capital to entrepreneurs all over the world. Poverty exists in every country, including the United States, and Kiva hopes to address poverty wherever it exists.
For more information on U.S. Microfinance please visit:http://fieldus.org/index.html
http://www.microenterpriseworks.org/
I thought about it for a while and decided that Kiva’s right. As an organisation, they should not be excluding the US. In fact, I think they’re filling up a void where people who need microloans can now have an avenue to obtain them. These are individuals who have dreams and whose dreams, if they work out, will help to create jobs and improve the society around them.
Would I lend to someone in the US? No.
Why? Because the reason I’m involved in the Kiva ecosystem is to make as much bang for my buck. That educated, experienced from the US that’s asking for $7000. He’ll probably get enough to buy equipment. If that went to africa, that would probably help fund a huge supply chain for village.
That said, I think this just emphasises the point that lenders get involved for a variety of reasons and Kiva’s doing a great job because it does 2 things effectively:-
- It acts as a platform for lenders and borrowers to meet. (which is true to their mission)
- The final decision of who to lend to is still in the hands of the lender.
I do hope that they never stray away from microloans though. I’ll start bitching the day I start seeing borrowers asking for 50k loans(that’s what banks and VCs are for) or if default rates from the US go too high without Kiva doing something.
More From ridz84
- Tips on How To Increase Daily Productivity
- Just sharing my thoughts…
- Pong your way to infamy on Ping.sg
