Micro-lending with kiva.org

I recently came across Kiva.org and am crazy impressed. Through Kiva you can make $25 loans to low-income entrepreneurs in the developing world. Kiva does not operate the microfinance programs itself. Instead, they work as an intermediary with existing microfinance programs in other parts of the world. I was most impressed by their transparency (you can actually see where your money is going) and user interface, but they are also incredibly effective (they have a 100% return rate on loans currently) and self-sustaining (when your loan is paid back you can either reinvest or get your money back.)

Will I get my money back? (from their FAQ)

Your loan is not guaranteed, therefore there is a chance that you will not get your money back… Your Kiva.org loan is a low-risk loan. Microfinance loans worldwide are generating repayment rates of 97% (UNCDF: Basic Facts About Microfinance). To date, Kiva.org’s repayment rate is 100%. If you are still concerned about repayment, minimize your risk by diversifying – loan $25 to a number of businesses rather $100 (or more!) to one business.

About Microcredit (from Wikipedia)

Microcredit is the extension of very small loans (microloans) to the unemployed, to poor entrepreneurs and to others living in poverty who are not bankable. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the provision of financial services to the very poor; apart from loans, it includes savings, microinsurance and other financial innovations.

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