I know I've talked about it here before, but now's the perfect time again. Kiva is one of my favorite charities. For those of you who aren't familiar with it, here's a short run down of how it works.
- Someone needs a loan. Typically a small amount and for a specific issue- i.e. $500 for a home repair or to buy some cattle or to add inventory to their store. These borrowers are typically oversees, although some are from the U.S.
- Say the loan is for $500 for a couple dairy cows. Kiva lists their loan on their website and tries to find 20 people will to each give $25. If you want to loan, you make a $25 payment through Paypal.
- Once the $500 is raised the borrower has money for their new cows and now has to start paying that money back. The terms can vary- some pay back all at once at the end of a time period, some pay a little each month until the loan is paid back. Some pay a little each month and then have a large balloon payment at the end. It all depends on the terms of the loan. All terms are spelled out in each loan's listing.
- Your money is deposited as a Kiva credit. Any time you have a credit, you can relend it, transfer it back to your Paypal account, or just do nothing and let it sit in your credits.
- Eventually, the borrower repays his loan. And voila, you've successfully made a micro finance loan and had it repaid.
Have any questions? I've made 30 loans to date. Lay them on me, I'd be happy to answer.