Just like most clubs, the Rotary Club of Berea sought an international project. In February 2008, our club did its due dillgence and decided to make a $500 investment with Kiva International. Kiva is a crowdfunding organization that makes microloans available to people and groups around the world. After our initial invesment, the club was so pleased with Kiva’s performance that they made additional $500 investments in April 2010 and September 2011, for a total investment of $1,500.
What is Kiva:
According to the Kiva webpage, there are over 1.7 billion people globally that cannot access financial services.
Kiva is an international nonprofit, founded in 2005 in San Francisco, with a mission to expand financial access to help underserved communities thrive.
We do this by crowdfunding loans and unlocking capital for the underserved, improving the quality and cost of financial services, and addressing the underlying barriers to financial access around the world. Through Kiva's work, students can pay for tuition, women can start businesses, farmers are able to invest in equipment and families can afford needed emergency care.
100% of every dollar you lend on Kiva goes to funding loans.
How Does It Work:
After the club created its profile, we were able to deposit the intial investment. At any time, the club could request the remaining funds in the account be returned to them. The club appointed a “caretaker” of the account who is responsible for maintaining the account and making loans, as well as reporting to the club members.
The account manager reviews story blurbs written by field partners on behalf of loan requesters. The stories share a little about the requester, what the funds will be used for, if they are part of a group or on their own, if they have taken past loans and if so, the success stories of the loans. If the account manager feels the request aligns with the club’s values and the 4-Way Test, the manager will select to make a loan in the amount of $25 (although Kiva has been changing their requirements recently). I typically wait for $100-$200 in loan repayments to be available and will review the stories and make 4-8 loans at a time. This then completes the hands on work of the account manager.
Each loan is for a different amount. For example, a loan may be needed for $600. Kiva will accumulate the microloans from 24 other loaners (each in the amount of $25) and once the loan has been completely funded, the local field office will issue the loan and work with the loan requester on a repayment schedule. Once the loan has been repaid (this can be partially repaid or repaid in full), the loaner will get a portion of the $25 loan returned until it is fully repaid. The account manager can then relend the money in the account.
Here is the example found on the Kiva webpage:
Someone applies for a loan:
Margarita needs $1,000 to expand her tortilla business, so she applies for a loan with CrediCampo, a microfinance institution (MFI) and one of Kiva’s lending partners.
A Lending Partner disburses their loan and uploads it to Kiva.org:
CrediCampo posts Margarita’s loan to Kiva.org to cover the cost of the loan, with editing and translation help from Kiva volunteers.
You lend a little toward their goal:
You see Margarita’s story and want to support her business. You lend $5 (or more!) to help crowdfund the full loan amount.
The loan is successfully funded:
Thanks to you and 31 other lenders, Margarita’s $1,000 loan is fully funded!
Kiva sends the funds to the Lending Partner:
100% of the loan amount is sent via wire transfer to CrediCampo, who provided Margarita with the capital she needs to invest in her business.
The borrower invests in their livelihood:
Margarita uses her Kiva loan to buy corn, gas, and firewood so she can improve production, increase her income to support her family, and keep her children in school.
You get repaid:
As Margarita starts earning more, she begins sending repayments to CrediCampo, which are repaid to you and other lenders who helped fund her loan. These funds go straight into your Kiva account. (Kiva borrowers have a 96.4% repayment rate on average.)
Repeat:
You can relend your funds to support another borrower again and again! Your dollars can travel the world, changing lives one loan at a time.
Our Success Story:
We have been making Kiva loans for over 15 years. Through the relending process, we have made 923 loans for a total value of $23,125. It’s staggering to think that our $1,500 has reached the lives of 923 individuals and groups in 82 different countries. Our account is in the 99th lending percentile. We have statistically supported 71.57% females and 28.43% males which is incredible if you think about how difficult it is for women in other cultures to aquire financial security. We tend to favor groups in the agriculture and food service category above others with the thought that groups will hold each other responsible to make repayments.
Here is a breakdown of the countries we have supported:
Here is a breakdown of the categories we have supported through the years:
Rotary International Team:
Our club’s first account manager retired from maintaining the account around 2012-2013. After taking over, I realized how beneficial Kiva was to the global community and in July 2014, I began a “Rotary International” Team. Since inception, our team has grown to 84 members worldwide. We have made 9,313 loans (as of October 2023) which has a total value of $291,510. We are the #9 Amount Funded (All Time) and #3 Amount Funded (This Month).
What Are The Risks:
Every loan has a risk of not being repaid (which is few and far between). In addition, some loans have currency exchange losses when they are repaid. Our initial $1,500 investment is worth $866 today. That means, over 15 years, we have lost $634. This averages to ~$42 lost per year or ~$3.50 per month.
In summary, our club has been very pleased with our global impact with such a low investment. We know these “tiny” loans are making an immense impact on the real lives of our global community. The pictures and stories of REAL hardship are humbling and the appreciation shared by the recipients drive us to move forward.
If you are interested in joining Kiva (both individually or as a club), please feel free to reach out to Matthew Lombardi at Gian624@hotmail.com or by creating an account with www.kiva.org. Don’t forget to join our “Rotary International” team.