Kiva and Microfinance: A Pain-Free and Rewarding Experience
Kiva and microfinance have provided me with a unique platform to contribute to global causes and donate without using the word 'donate'. My experience with Kiva has been both renewing and rewarding.
Understanding the World of Microfinance
Kiva is a leading non-profit organization in the microfinance industry. It operates on a model where donors can give small loans to individuals in developing countries, with the expectation that these individuals will use the money to start or expand their businesses, ultimately benefiting both the recipients and the economic landscape of the communities they live in.
As a long-standing participant in Kiva's lending community, I have contributed loans totaling over $1,000 and have seen a positive return on my investment, although it appears as if the money has been "paid back." In reality, by lending through Kiva, I have been supporting people in more ways than one, as the initial loan I gave in 2013 has helped me lend over $11,000 over the past 10 years.
Using Kiva for Automated Lending
The ease and automation provided by Kiva make the lending process effortless. I have set up auto-loan rules that ensure my lending activity runs smoothly without constant intervention. My credit from repayments funds new loans, and I can participate in lending without much effort once the rules are in place. This has reduced my need to actively manage my Kiva account, although I have still experienced a minor loss due to currency exchange rates and defaults on loans.
The year-on-year default rate has been a mere 0.24%, which is quite impressive. Similarly, the currency exchange loss is relatively low at 0.13%. These rates indicate that Kiva's system is generally robust and performs well in handling the complexities of international lending.
Personal and Corporate Lending Experiences
My wife has been an active Kiva lender for over 10 years, having started with four $25 loans. Over the years, she has lent money to individuals in various countries and sectors, with a primary focus on promoting educative projects. Although she doesn't add new money often, the repayment cycle has allowed her to reinvest the funds to help others. She has reported only one default in almost a decade, indicating high reliability and trust in Kiva's loan approval process.
Personally, I have lend over $1,300 over 48 loans, experiencing a modest loss of $10. The variety of sectors and countries involved in my lending has been an enriching experience. With an active presence in 16 countries and 15 different sectors, it's clear that Kiva's impact is widespread and diverse.
The Profitability of Lending Through Kiva
Lending through Kiva is more than just a financial investment; it's an emotional and social one. The "feel good" factor, often difficult to quantify, is high. The success of this model lies in providing small but meaningful loans to individuals and communities that might otherwise go overlooked by traditional financial institutions.
I keep an estimated $400 available for monthly repayments, using the funds to make new loans. The monthly defaults are a minor inconvenience, given that each loss is typically after only partial repayment. This makes Kiva a cheap hobby in terms of time and expense, while still providing a significant social impact.
In conclusion, Kiva offers a rewarding and efficient way to contribute to global microfinance efforts. Its automation, low default rates, and the ability to reinvest funds make it an attractive platform for those looking to support social and economic development worldwide. The word 'donate' may not be used, but the impact is significant.