Microfinance - lending through Kiva

Today, I lent money to a lady in Cambodia to build a toilet. How? Through the wonders of microfinance.

I'm hoping you have heard of Kiva. I first heard of it a few years ago via twitter and have been a fan ever since. Today, I financed my third loan with them.

So what is microfinance? Well, it's "a general term to describe financial services to low-income individuals or to those who do not have access to typical banking services.Microfinance is also the idea that low-income individuals are capable of lifting themselves out of poverty if given access to financial services. While some studies indicate that microfinance can play a role in the battle against poverty, it is also recognized that is not always the appropriate method, and that it should never be seen as the only tool for ending poverty." - (via the Kiva website)

I'm not naive enough to think that my $25 contribution to Vesna's loan will lift her out of poverty and into financial abundance. But I hope that it will make a difference to her life. What is more important than having a sanitary place to go to the toilet?

You can fund loans for all different types of business ventures or reasons. You can lend to people all over the world. If you find the choice overwhelming, it helps to have an idea in mind of who or what type of venture you'd like to contribute to.

Today, I used the messageboard of one of my "teams", Nerdfighters, to find Vesna's loan. Teams are simply self-organized groups of Kiva lenders where members connect and have shared lending goals. Someone else had funded her and posted a message about it.

I knew that I wanted to lend to a female, and usually I focus on those who are trying to start or maintain a business to support their family. My last two loans were for a lady in Kenya for her clothing shop and a lady in Uganda for her beauty salon. But today, Vesna's situation spoke to me and I didn't hesitate to hit the lend button.

Now, Kiva has been criticized for various things over the past few years, and I'm not unaware of the issues surrounding some of their loans and practices. In particular is a worry about partnering with Strathmore University and its association with Opus Dei. They addressed these concerns here. However, at the end of the day, I'm satisfied that the loans I'm making are helping those who need it. I encourage you all to do some googling and research before lending via Kiva or using any sort of microfinance website, in the same way you would look into any sort of charity before handing over your hard-earned money for a donation.

One last thing - I was not sure about Kiva's loans to First World country borrowers. What possible reason could a person in the US need to access microfinance? Would I be funding someone's food van startup in Brooklyn? But then I realised that even in the First World, there are people that are unable to access bank financing. It's a personal question, but one worth thinking about - does Dennis from Newark deserve to have the right to ask for a loan to fund his window cleaning business, as much as Karo in Armenia for tyres for his truck?

*This is not a sponsored post. I just wanted to share my latest loan with you all, and put down some thoughts about Kiva that I've been having lately.